Pohang’s factories spit with thick gray plumes, a symbol of a future that could be just as much for the South Korean steel sector, under the threat of the new customs duties of its American partner.
The port city of half a million inhabitants, planted on the east coast of South Korea, has been the steel of the country for decades, embodied by its POSCO steel giant.
The mayor of Pohang, Lee Kang-Deok, during an interview with AFP in his office on February 13, 2025 in South Korea / Jung Yeon-I / AFP
Asian’s fourth economy was also the fourth exporter of this alloy to the United States in 2024, weighing almost 13% of imports from its ally.
But the sector is increasingly suffering from international competition and, in Pohang, we fear the devastating consequences that the new customs duties on steel imposed by US President Donald Trump could have: 25% from March 12.
The Factory of the POSCO steelmaker, the largest steel producer in South Korea, on February 13, 2025 in Pohan / Jung Yeon-I / AFP
“The steel industry is a vital national industry”summarizes with AFP the mayor of Pohang, Lee Kang-Deok, recalling that it serves as fuel for key activities “Such as construction, automobile and shipbuilding”.
“If the steel industry collapses, the entire South Korean economy will be destabilized”warns the elected official.
“Development pillar”
A Seoul, nearly 270 kilometers away, Pohang has become a major industrial center thanks to the presence of Posco, in a country where most of the resources and centers of interest are concentrated in the capital.
Bang Sung-Jun, former employee of Hyundai Steel and head of the pohang branch of the Metalurgy Korean Workers’ Syndicate on February 13, 2025 in South Korea / Jung Yeon-I / AFP
The steelmaker, a national leader and heavy goods vehicles, was one of the locomotives in the industrialization of South Korea and is among the engines of his foreign trade, alongside Hyundai Steel and Dongkuk Steel in particular.
“Pohang has long been a Symbol city of steel (…), acting as a pillar of the country’s development”says Bang Sung-Jun, former employee of Hyundai Steel and head of the pohang branch of the Korean Metallurgy Workers’ Syndicate.
This industry “Has brought quality jobs and supported the local economy”he told AFP, without denying the environmental imprint of the sector or sometimes dangerous working conditions.
“Posco nourishes pohang”
The South Korean steel has faced increasingly large challenges in recent years, between the overcapacity of certain competitors, in particular China, and a drop in global demand, which draw prices down.
Steel imports in the United States / Jonathan Walter, Christophe Thalabot / AFP / Archives
American customs duties are likely to further complicate the equation: in the event of the disappearance of outlets in the United States, cheap Chinese steel could flood Europe and Southeast Asia, even more threatening the shares South Korean companies, according to analysts.
“Trump’s protectionism will undoubtedly affect (…) the South Korean steel industry, already put under pressure by exports at low prices from China and an overwhelming Japanese Yen exchange rate”assures AFP Vladimir Tikhonov, professor of Korean studies at the University of Oslo.
“The consequences will be important”he predicts.
Some experts nevertheless believe that the tax war launched by Donald Trump can open other doors to the Firms in South Korea and bring out new customers.
The main entrance to a South Korean steel industry Hyundai Steel in Pohang, February 13, 2025 in South Korea / Jung Yeon-I / AFP
In Pohang, however, the time is not for betting on possible positive benefits: metal workers are afraid of losing their jobs, while several factories have already turned off.
AFP journalists, for example, visited a Hyundai Steel factory closed at the end of 2024. She looked at the stop and was then only monitored by a handful of agents.
Union signs displayed messages against management demanding its apologies, noted these reporters, seeing inside what seemed to be a lot of debris.
“For us, workers, it has always been a crisis without opportunity”deplores Bang Sung-Jun, the union official.
Lee Woo-Man, employed by a subcontractor from Posco for two decades, during an interview with AFP in Pohang, on February 13, 2025 in South Korea / Jung Yeon-I / AFP
Lee Woo-Man, an employee of a subcontractor from Posco for two decades, told AFP that 20 colleagues lost their jobs last year.
He explains to expect the employment rate “Decrease even more” Over the next four years and thinks that the customs duties decreed by Donald Trump will speed up the decline of Pohang.
Mr. Lee says he grew up here saying that he “Posco nourishes pohang”.
But the city has lost its vitality of yesteryear and the sight of the chimneys makes it more anxious today than anything else.
“I don’t know when all that will collapse”he breathes.
(tagstranslate) American information