CODIT Explores Strategic Responses to U.S. Tariff Impacts on Korean Metals Industry

In a recently published issue paper, the CODIT Global Evidence-Based Policy Institute, led by Executive Director Hae-young Song, delves into the significant effects of the U.S. government's 50% tariffs on aluminum and copper, with a particular focus on South Korea's non-ferrous metals sector. As South Korean companies grapple with the consequences of these tariffs, this analysis aims to provide a comprehensive understanding of the challenges ahead while offering strategic recommendations for navigating this complex landscape.

The Korean non-ferrous metals industry is currently valued at approximately KRW 57 trillion and is largely characterized by the prevalence of small and medium-sized enterprises. Unlike the steel industry, achieving economies of scale presents a challenge, making the sector particularly vulnerable to global market fluctuations. Companies in this field are further constrained by difficulties in research and development (R&D), environmental, social, and governance (ESG) compliance, and effective supply chain management. The industry's heavy reliance on imported raw materials, particularly for aluminum production, coupled with an export-dependent structure for copper, heightens its exposure to the recent U.S. tariff policy.

According to the findings presented in the CODIT issue paper, the newly instated tariffs are poised to drastically reduce South Korea's exports of aluminum products such as sheets, foils, and extrusions. Moreover, the tariffs could render copper tubes and bars practically unsellable. South Korean manufacturers are now facing a