- South Korea, Japan Launch Diplomatic Push to Avert Tariff Fallout.
- Jet Fuel and Gasoline Imports from Asia at Risk.
- West Coast Refinery Closures Could Amplify Fuel Supply Strain.
President Donald Trump’s choice to slap a 25% tariff on imports from Japan and South Korea, along with varying rates on 12 other Asian countries, could shake up the energy and steel trade across the Pacific Rim. This announcement, shared on social media on July 7, is set to kick in on August 1, but there’s still room for negotiations. South Korea has already dispatched senior officials to Washington, while Japan and Indonesia are exploring diplomatic avenues to tackle the looming tariff concerns, reports S&P Global.
Energy Flows Under Threat
South Korea, the leading supplier of jet fuel to the US, shipped out 4.46 million barrels in May 2025 — the highest amount since August 2021. In June, imports from South Korea to the US West Coast included about 150,000 barrels per day of jet fuel and 17,000 barrels per day of gasoline, with those numbers having surged earlier due to a fire at Valero’s Benicia refinery. While South Korean refiners are hoping for an exemption on oil products, there’s still a cloud of uncertainty hanging over them.
This potential disruption comes at a tough time, as regional refining capacity on the West Coast is expected to drop. Phillips 66 plans to close its Los Angeles refinery by the fourth quarter of 2025, and Valero is set to shut down Benicia in April 2026, which will increase reliance on imports and likely drive up fuel prices during peak maintenance seasons.
LNG Shifts and Rising Price Pressures
In light of the tariff threat, South Korea is considering ramping up LNG imports from the US, a strategy that Indonesia is also contemplating, although the exact volumes are still up in the air. Thailand, looking to balance its trade surplus with the US, has committed to boosting its LNG purchases after bringing in 710,000 metric tons of American LNG so far this year.
Fuel prices are already on the move. On July 8, Platts reported that Los Angeles CARBOB gasoline hit 233.5 cents per gallon, marking the highest level since June 20. Meanwhile, jet fuel climbed to 244.86 cents per gallon, the strongest price we’ve seen since early July. On the other hand, freight costs for clean tankers travelling from South Korea to the US West Coast dropped to their lowest point since mid-June. In contrast, the JKM benchmark for LNG delivered to Northeast Asia increased to $12.619 per MMBtu, the highest since late June.
Steel Trade Faces Instability
The proposed tariffs are creating significant hurdles for Asia’s steel sector. Approximately 30% of China’s steel exports from January to May were sent to the 14 countries affected by the US tariffs. With domestic demand struggling due to issues in the real estate market, exports have become a vital lifeline for Chinese producers. A spike in shipments from March to June was fueled by buyers eager to lock in cargoes before the anticipated tariffs, but industry insiders predict a slowdown in the latter half of 2025.
Regional Prices Slide as Uncertainty Grows
Asian steel prices are already feeling the strain, with Platts’ HRC SS400 CFR Southeast Asia assessment dropping to $447 per metric ton on July 8 — a nearly 23% decline since the beginning of 2024. Analysts caution that US tariffs could further weaken regional demand, exacerbate price drops, and heighten trade tensions across Asia.
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Source: S&P Global
