Investing.com-- Shares of South Korean steelmaking firms weakened on Monday after U.S. President Donald Trump said he will impose 25% tariffs on all U.S. imports of steel and aluminum.
Shares of Dongkuk Steel Mill Co Ltd (KS:001230), Hyundai Steel (KS:004020), Tcc Steel (KS:002710), and POSCO (NYSE:PKX) Holdings (KS:005490) fell between 1% and 3%, while the broader KOSPI rose 0.2%.
South Korea is the fourth-largest exporter of steel to the U.S, behind Mexico, Brazil, and Canada.
The country exported about 2.5 million tons of steel to the U.S. in the past 11 months, data from the International Trade Administration showed.
Trump said he will announce the new tariffs on Monday, and that they, along with his other tariffs, were aimed at establishing trade practices more beneficial to America. Trump has also expressed an intent to shore up domestic steel production- an industry that was battered by cheap Japanese and Chinese steel through since the 1980’s.
The tariffs will be borne by U.S. importers, and stand to weigh on steel demand in the country, given that the cost of steel imports will increase.
But bigger losses in South Korean steel stocks were limited by strength in the U.S. dollar, given that a stronger dollar benefits export-oriented stocks. The dollar firmed sharply on bets that Trump’s tariffs will underpin U.S. inflation, keeping interest rates high.
Sustained strength in the dollar could also limit the margin impact of Trump’s tariffs.