U.S. Tariffs on Aluminum and Copper Threaten Korea's KRW 57T Non-Ferrous Metals Sector
The Trump administration's new tariffs on aluminum and copper have sent ripples through South Korea's KRW 57 trillion non-ferrous metals sector, dominated by small and mid-sized firms. A recent issue paper by CODIT Global Evidence-Based Policy Institute warns of severe impacts on key downstream sectors like automobiles, semiconductors, and EV batteries. South Korea must now navigate a 'triple burden' and adopt a dual-track approach to mitigate these challenges.
The paper, titled 'U.S. Imposes 50% Tariffs on Aluminum and Copper: Strategic Responses for South Korea', outlines the dire situation facing South Korean producers. The 50% tariffs threaten to sharply cut exports of aluminum sheet, foil, and extrusions, and may even make copper tubes and bars virtually unsellable. This collapse in U.S. exports, coupled with rising costs from market diversification and pressure to localize production, forms the 'triple burden' that the industry now faces.
To tackle this, the Institute proposes five policy recommendations. South Korea is urged to negotiate aluminum-specific concessions with the U.S. while simultaneously reinforcing supply chain resilience through long-term policy tools. The exact ministry or agency leading these efforts is not specified, but it is expected to involve national or European trade ministries. The Institute also suggests enhancing supply chain security in the non-ferrous metal industry, a task that would typically involve such ministries.
The tariffs pose significant risks to South Korea's non-ferrous metals sector and its downstream industries. To navigate this challenge, South Korea must adopt a dual-track approach, combining negotiations with the U.S. and long-term policy tools to bolster supply chain resilience. The specific entities leading these efforts remain unclear, but their role will be crucial in mitigating the tariffs' impact.
