The proposed Section 232 move would cover 14 derivative products and could pressure smaller Korean cable makers, even as larger exporters may offset costs through pricing and US production.
A US plan to impose a 25% tariff on electric conductor cable and 13 other derivative products under Section 232 (a US national-security trade measure) is emerging as a fresh risk for South Korea’s cable industry, which has benefited from AI data-center construction and power-grid replacement demand in the US. The Commerce Department released the proposal on Aug. 3 and is still taking public comments, but officials and industry executives cited in the report said the department appears likely to move to the higher rate in the near term. Electric conductor cable is seen as the most significant item for Korean exporters. The Ministry of Trade, Industry and Energy is comparing the US tariff category with Korean HS export codes, while the industry gauges the likely impact on shipments that reached about $697 million to the US last year. Companies exposed include LS Cable & System, Taihan Cable & Solution and Iljin Electric. The tariff backdrop has shifted several times. After imposing 50% tariffs last year on imported steel, aluminum and copper, the US later adopted a content-based system that applied 50% to metal content and a separate 15% reciprocal tariff to the rest. It then moved in April to a flat 25% tariff for most products except transformers and machinery, while some industrial machinery and power-grid equipment linked to the US AI buildout temporarily kept a 15% rate. The latest proposal would raise some of those products to 25%. The impact is expected to be uneven across the industry. Extra-high-voltage cable makers may have some flexibility because local US supply remains below demand for products rated at 138 kilovolts to 345 kilovolts or higher, allowing part of the tariff burden to be passed on to customers. Some executives also argue that equal tariffs on rival exporting countries may limit the competitive damage, and LS Cable & System is increasing output after completing its US plant. Smaller manufacturers and suppliers of low- and medium-voltage wires, telecom cables and wiring parts are considered more vulnerable, especially given large long-term supply contracts tied to the US infrastructure boom that could trigger legal and commercial disputes over tariff costs. Industry officials said countermeasures are needed, including trade talks with Washington and offshore production arrangements.