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Ministry of Trade and Industry says South Korea will minimise the impact of a 50% tariff on steel products.

The South Korean Industry Ministry announced on Monday that it would respond to the imminent 50% U.S. steel tariff as part of its ongoing trade negotiations with Washington to minimize the impact on the industry.

U.S. president Donald Trump announced on Friday that he would increase tariffs for imported steel and aluminium to 50%, up from 25%. This will put more pressure on steel producers around the world and intensify his trade war.

In a press release, the ministry said that it held an urgent meeting with officials of major steelmakers in the country, including POSCO, and Hyundai Steel.

In morning trading, shares of South Korean steelmakers fell on Monday. POSCO and Hyundai Steel both dropped 3% while SeAH Steel Corp was down 6.3%.

According to data from the American Iron and Steel Institute, South Korea was the fourth largest exporter of steel into the United States last year behind Canada, Mexico and Brazil.

South Korea, an important ally of the United States, demanded that tariffs be removed from steel, automobiles, and other items during discussions with the United States.

Seoul agreed to create a trade package before the 90-day period of Trump's reciprocal duties in July. However, due to the lack of political leadership in the country, it has been hard for negotiators make major decisions.

Hyundai Steel announced in late March that it would build a $5.8 Billion factory in Louisiana as a response to U.S. Tariffs. However, the factory won't open until 2029. Hyundai Steel's larger rival POSCO made a preliminary agreement to invest in the factory. (Reporting and editing by Jack Kim, Hyunjoo Ji and Ed Davies)

(source: Reuters)