South Korea Pushes to Extend U.S. Tariff Freeze Beyond 90 Days
South Korea is making an urgent push to convince the United States to extend a temporary freeze on steel and aluminum tariffs beyond the current 90-day period. The move highlights Seoul’s concerns over economic stability and the future of trade relations with Washington, especially as global supply chains remain fragile.
The request comes amid growing fears that the reimposition of tariffs could hurt South Korean exports, strain diplomatic ties, and disrupt key industries like automotive and electronics. South Korea’s Ministry of Trade, Industry, and Energy has already initiated talks with U.S. officials to secure an extension before the freeze expires in September 2025.
Why the Tariff Freeze Matters
The 90-day tariff freeze, announced by the U.S. in June 2025, was meant to give both countries time to negotiate a more permanent solution. It temporarily suspended Section 232 tariffs of 25% on steel and 10% on aluminum imported from South Korea. These tariffs, first imposed by the Trump administration, have long been a source of tension.
Extending the freeze would give both sides more time to:
- Explore alternatives that avoid tariffs while addressing U.S. concerns about steel overcapacity.
- Strengthen supply chain cooperation on critical materials.
- Avoid sudden cost increases for industries that depend on South Korean steel.
A report by Yonhap News Agency confirmed that South Korea’s trade negotiators are emphasizing the importance of stability for both countries’ manufacturers.
Impact on South Korean Industries
Steel is a major export for South Korea, and the U.S. is its third-largest market. Reimposing tariffs would raise prices for South Korean steelmakers like POSCO and Hyundai Steel, making their products less competitive.
According to data from the Korea Iron & Steel Association:
- South Korea exported nearly 2.3 million tons of steel to the U.S. in 2024.
- Tariffs could reduce exports by up to 40%, hitting revenue and jobs.
In the automotive sector, many car makers rely on affordable, high-quality steel from South Korea. If tariffs return, costs for manufacturers like Hyundai and Kia could rise, leading to higher car prices in the U.S. market.
Trade expert Kim Hyun-jung told The Korea Herald, “Maintaining tariff-free exports is vital for our economy. A sudden tariff hike would ripple through supply chains and weaken South Korea’s competitiveness”.
U.S. Perspective on the Tariffs
The Biden administration’s temporary freeze reflected an attempt to ease trade tensions with key allies. However, American steel producers have pushed for the tariffs to return, arguing that cheap imports still threaten domestic jobs and production.
A recent statement by the American Iron and Steel Institute (AISI) said, “We support the tariffs as a tool to protect American industry from unfair trade practices and global overcapacity”.
This makes negotiations complicated. The U.S. needs to balance its relationships with allies like South Korea against pressure from domestic industries and labor unions.
South Korea’s Strategy
To secure an extension, South Korean officials are:
- Highlighting the importance of cooperation on supply chains for semiconductors, EV batteries, and critical minerals.
- Pointing out that higher costs from tariffs could undermine shared goals like reducing inflation and stabilizing the global economy.
- Offering to collaborate on measures that ensure fair trade without resorting to blanket tariffs.
Extending the tariff freeze would help both countries find a long-term solution that supports their industries and preserves a strong trade partnership.
Global Trade Implications
This dispute is not just about steel or South Korea. It has wider significance for global trade dynamics. If the U.S. and South Korea fail to reach an agreement:
- Other countries could face similar tensions over tariffs.
- It could set back efforts by the Biden administration to strengthen alliances in Asia.
- Ongoing global efforts to secure critical supply chains could face new disruptions.
According to a recent analysis by Bloomberg, trade frictions among allies risk undermining cooperation on broader economic and security challenges in the Asia-Pacific region.
Final Takeaway
South Korea’s push to extend the U.S. tariff freeze beyond 90 days highlights the stakes for both countries’ industries and broader trade relationships. The next few weeks will be critical as negotiations intensify before the freeze expires in September.
A successful extension would help stabilize prices, secure supply chains, and maintain strong diplomatic ties. Failure, however, could reignite trade tensions, disrupt industries, and create new economic challenges for both nations.
Investors, manufacturers, and policymakers will be watching closely for any updates from Seoul and Washington. The outcome could shape not just South Korea’s steel sector but also future trade strategies across the Asia-Pacific.
FAQs
The tariffs are 25% on steel and 10% on aluminum, but they are temporarily suspended under a 90-day freeze that ends in September 2025.
South Korea wants to avoid higher export costs, protect jobs, and give more time to negotiate a long-term solution without damaging trade relations.
Yes, it could impact the automotive and electronics sectors, which rely on South Korean steel and aluminum for affordable production.
Disclaimer:
This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.