International credit rating agency Moody’s has stated in a report regarding the Section 232 investigation of the US that the US plan to impose tariffs on steel imports is credit negative for Moody's-rated Asian steel producers, but the impact will not prove material.
According to Moody's, the impact of the planned 25 percent tariff on steel imports for all countries would be manageable for the Asian steel sector and Moody's-rated steelmakers in the region, because exports to the US account for relatively small portions of their total steel production.
The credit rating agency points out that China's direct steel exports to the US represented only one percent of total exports during the first nine months of 2017. In addition, the reliance of Chinese steel companies on exports decreased substantially in 2017.
In contrast, the South Korean steel sector demonstrates a relatively high exposure to US exports, given its position as the third-largest steel exporting country to the US during the first nine months of 2017. Nevertheless, even in the case of South Korea, steel exports to the US are mostly focused on pipes and tubes (57 percent of exports to the US in 2017, according to the Korea Iron & Steel Association), product types that the two Moody's-rated steelmakers, POSCO and Hyundai Steel Company, show little exposure to.