Steel-producing countries in Asia took a cautious approach to plans by U.S. President Donald Trump to impose tariffs on steel and aluminum, saying they would seek details of the plans before responding, Reuters reported.
Trump said details on duties of 25% on steel and 10% on aluminum would be formally announced in the week of March 5, as he pledged to stop unfair trade practices, particularly by China.
"The impact on China is not big," Li Xinchuang, vice secretary-general of the China Iron and Steel Association, told Reuters. "Nothing can be done about Trump. We are already numb to him."
Although China only accounts for 2% of U.S. steel imports, its massive industry expansion has resulted in a global glut of steel driving down prices, said the report.
South Korea and Japanese trade officials said they will seek clarifications on the planned tariffs. "For us, the worst-case scenario was a 54% tariff," a South Korean trade ministry official said, requesting anonymity. "Still, if the option for a global tariff of at least 24% is taken, that will still affect our steel exports to the U.S."
South Korea is the third-largest steel exporter to the U.S. after Canada and Brazil.
Japanese Trade and Industry Minister Hiroshige Seko said Japan will wait for details, adding: "I don't think exports of steel and aluminum from Japan, which is a U.S. ally, damages U.S. national security in any way, and we would like to explain that to the U.S."
Asian steel producers and exporters fear that the U.S. tariffs will trigger retaliation by other countries and spread beyond metal markets into a full-blown trade war. Steelmakers also fear the U.S. tariffs could result in their domestic markets becoming flooded with steel products, said Reuters.
Shares of Asian steelmakers fell in reaction to the U.S. tariffs. South Korea's POSCO was down 3.18%, while Japan's Nippon Steel & Sumitomo Metal Corp fell 3.83% as of 12:10 a.m. ET.
Asian markets were in the red in midday trading. Japan's Nikkei 225 Index fell 2.53%, China's Shanghai Composite Index was down 0.33% and Hong Kong's Hang Seng Index dropped 1.49% as of 12:19 a.m. ET.
