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U.S. tariffs on steel and aluminium come into force

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Canada, Brazil, Mexico, South Korea most affected

By Heekyong Yang and Byron Kaye

SEOUL/SYDNEY, March 12 (Reuters) - Two major South

Korean steelmakers are considering their investment options in

new facilities as major producers worldwide brace for increased

tariffs on U.S. steel and aluminium imports that came into force

on Wednesday.

The options include investment in operations in the U.S.,

they said, although no final decisions had been made.

U.S President Donald Trump's action to bulk up protection

for American steel and aluminium producers restores effective

global tariffs of 25% on all imports of the metals and extends

the duties to hundreds of downstream products made from the

metals, from nuts and bolts to bulldozer blades and soda cans.

The countries most affected by the tariffs are Canada, the

biggest foreign supplier of steel and aluminium to the U.S.,

Brazil, Mexico and South Korea, which all have enjoyed some

level of exemptions or quotas.

"We plan to focus more on high-value-added products and

enhance our technological capabilities to produce existing

products more economically," a spokesperson for South Korean

steelmaker POSCO Holdings ( PKX ) said.

"We are also reviewing investment plans for upstream steel

processes in the U.S. or India, but no final decision has been

made yet," the spokesperson said.

Local rival Hyundai Steel is considering

building a steel factory in the Southeastern part of the U.S.

but nothing has been decided, a spokesperson said, adding the

increased U.S. tariff would have negative impact on the Korean

steel industry.

South Korea previously benefited from a duty-free steel

quota under an agreement made in 2018 during Trump's first term

as president.

Its trade ministry said on Wednesday the government will

prepare measures that would include supporting domestic firms'

investment overseas and expansion into new markets.

Other firms with less exposure to the U.S. market or with

major manufacturing presence there hoped the increased tariffs

would lift steel prices.

"As the U.S. tariffs come into effect, the company expects

to see the positive impact from an improvement in steel prices,"

a spokesperson for Australia-listed steelmaker BlueScope

said.

The company produces more than three million tonnes of steel

a year at its plant in Delta, Ohio, but exports just 300,000

tonnes a year to the U.S.. The spokesperson added that the

company was disappointed that Australia had not received an

exemption.

Australia's Prime Minister Anthony Albanese said on

Wednesday his country will not impose reciprocal tariffs on the

U.S. due to potential impact on inflation, and he would continue

to lobby the U.S. administration for a reprieve.

The BlueScope spokesperson said the company is working

closely with "the Australian trade and diplomatic staff in

Canberra and in Washington DC, and with a wide range of senior

representatives in Congress to ensure the BlueScope investment

proposition is fully understood."

In Vietnam, the fifth largest steel exporter to the U.S.,

traders said the new tariffs might benefit local companies, as

most of them had been slapped with 25% levies in 2018.

"I think Vietnam steel may benefit from this tariff," a

Hanoi-based steel trader said, declining to be named because he

was not authorised to speak to media.