Posted on 10 Oct 2025
Facing the European Union’s tightened steel tariffs, the Korean government is set to unveil a comprehensive policy package by late October, centering on enhanced incentives and strengthened antidumping measures aimed at safeguarding local steel firms.
Korea’s Ministry of Trade, Industry and Energy convened an emergency meeting on Friday to address the EU’s recent move to slash tariff-free quotas for steel products and double the duty to 50 percent. The meeting was hosted by Deputy Trade Minister Park Jong-won and invited key industry stakeholders to formulate a coordinated policy response.
The cross-ministerial initiative, titled Steel Industry Advancement Strategy, is slated for release later this month and will outline targeted measures to navigate global oversupply, bolster safeguards against unfair imports through antidumping mechanisms and introduce low-carbon standards with accompanying incentives.
Additional components include support for investments in hydrogen-based steelmaking and high-value specialty carbon steel, as well as enhanced safety protocols and strengthened upstream-downstream collaboration across the steel supply chain, the ministry said.
Also, given the EU's explicit commitment to take free trade agreement (FTA) partners into account when allocating quotas, Seoul intends to minimize the adverse impact on domestic producers by leveraging both formal and informal diplomatic channels. Authorities will actively explore mechanisms available under the Korea-EU FTA to ensure Korea's interests are adequately represented.
“As more countries tighten their export controls, there is a growing risk of a surge in diverted steel exports targeting markets with relatively weaker trade defenses,” the Industry Ministry said on Friday. “Swift and coordinated trade action is urgently needed to block the inflow of unfairly traded steel products.”
The European Commission, the executive arm of the EU, formally unveiled on Oct. 7 a proposal for the new tariff-rate quotas (TRQs) on steel, in which the annual tariff-free import quota would be slashed by 47 percent from 30.53 million tons to 18.3 million tons. Imports exceeding the quota would face a steep tariff hike from the current 25 percent to 50 percent.
The proposed TRQ scheme is expected to be adopted through a vote by EU member states — following the bloc’s standard legislative procedure — before the current safeguard measures expire at the end of June next year.
Already facing 50 percent U.S. tariffs, the new measures are likely to hit Korea’s steel exports to the EU starting next year, which currently stands as the second largest export market.
Korea exported $4.48 billion worth of steel products to the EU in 2024, nearly on par with exports to the United States, the No. 1 destination at $4.35 billion, according to the Korea International Trade Association. By volume, Korea shipped roughly 3.8 million tons of steel to the EU last year, entirely tariff-free.
With the new tariff measures, Posco and Hyundai Steel, Korea’s two largest steelmakers, are projected to face over 1 trillion won ($704 million) in tariffs starting next year, a figure that exceeds their combined 2024 annual net profit of 901.6 billion won.
Since the United States imposed a 25 percent tariff in March, the two companies paid a total of $57 million in tariffs through May, according to data submitted by Posco and Hyundai Steel to Rep. Park Soo-young of the People Power Party. In June, when the tariff rate rose to 50 percent, the combined duty payment surged to $42.6 million.
Steel exports to the U.S. market fell this year by 10.1 percent through August compared to last year, with a steep decline in July after the tariff rate hiked to 50 percent. The Korea Iron and Steel Association projects a roughly 9 percent drop in exports in the second half of the year compared to the first half due to the tariff.
Source:Korea JoongAng Daily
