US Tariffs Cast a Shadow over South Korea's 'Steel City' The Future of Pohang Hangs in the Balance

US Tariffs Cast a Shadow over South Korea's 'Steel City' The Future of Pohang Hangs in the Balance

As the smoke billows from the factories, the city of Pohang on South Korea's east coast faces an uncertain future. Washington's planned 25% tariff on all steel imports to the United States, set to take effect next month, threatens to devastate the industry that has been the backbone of South Korea's economy for decades.

Pohang, known as the steel city, boasts a rich history of steel production, fueling the country's rapid economic growth. In 2019, South Korea was the fourth-largest exporter of steel to the United States, accounting for 13% of total US steel imports. However, the industry has been facing intense pressure from foreign competition, particularly from China.

The city is home to major steel producers such as Posco, Hyundai Steel, and Dongkuk Steel, which have provided quality jobs and sustained the local economy. But the impending tariffs will intensify the challenges faced by these companies, making it difficult for them to compete with cheap Chinese steel that will be barred from entering the US market.

The impact of the tariffs will be significant, warns Vladimir Tikhonov, a professor of Korea studies at the University of Oslo. Trump's protectionism certainly will affect South Korea's long-suffering steel industry, already squeezed by low-price exports from China and unfavorable Japanese yen exchange rate, he notes.

Workers in Pohang are particularly concerned about job security and the threat of further layoffs. Many have already lost their jobs in recent years due to the decline in demand for steel, and the tariffs will only exacerbate the issue. For us workers, it has always been a crisis without any opportunities, says Bang Sung-jun, a former Hyundai Steel worker and official at the Korean Metal Workers' Union's Pohang branch.

The city's mayor, Lee Kang-deok, is equally alarmed about the potential impact of the tariffs on South Korea's economy. If the steel industry collapses, the entire South Korean economy will be destabilized, he warns. If we fail to respond effectively to President Trump's tariff measures, our country's economy could face an even greater shock, leading to an irreversible situation.

Some experts suggest that South Korean firms may find new export markets to mitigate the effects of the tariffs. However, for workers in Pohang, where several mills have already shut down, job security and the threat of further layoffs are the immediate concerns.

As one worker, Lee Woo-man, puts it, I don't know when this will all fall apart. He has worked as a subcontractor for Posco for two decades and expects employment in the city to decrease even more over the next four years. The tariffs, he believes, will accelerate the decline of the city, which has lost its vibrancy since his youth.

The crisis facing Pohang is not just about the steel industry; it's also about the future of a city that has been shaped by its industrial heritage. As Lee Woo-man reflects on his childhood memories of watching the smoke rise from the chimneys of massive mills, he wonders what the future holds for the city and its people.

The US tariffs may have sparked a crisis in Pohang, but they also present an opportunity for experts to come together and find innovative solutions to manage this crisis.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.