EU’s 50% tariff on steel deepens Korea’s export squeeze

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EU’s 50% tariff on steel deepens Korea’s export squeeze

Published: 09 Oct. 2025, 00:00

Audio report: written by reporters, read by AI

Steel products pile up at Pyeongtaek Port in Pyeongtaek, Gyeonggi on Aug. 18 as the United States expands its 50 percent tariff to cover 407 derivative steel and aluminum products. [YONHAP]

The European Union (EU) announced on Oct. 7 that it will raise the tariff on imported steel to 50 percent. It will also cut duty-free quotas by roughly half and levy the higher rate on shipments above the quota. The move follows the United States’ decision in June to set tariffs on steel and aluminum at 50 percent. Brussels acted to block a surge of diverted exports to Europe after Washington’s increase. For Korea’s steelmakers already reeling from U.S. duties, the EU's announcement adds fresh pressure.

The EU, alongside the United States, is a top destination for Korean steel and the largest single market by region. According to the Korea International Trade Association (KITA), Korea’s steel exports to the EU reached $4.48 billion last year, edging out the U.S. total of $4.35 billion. With the proposed tariffs, price competitiveness will erode, and shipments to Europe are expected to fall.

The impact of recent tariffs is already visible. Since May, when the U.S. measures took full effect, Korea’s steel exports have struggled. Exports to the United States dropped 25.9 percent in July, 32.1 percent in August and 14.7 percent in September. Adding the EU’s higher levy will only widen the drag.

The pain is not limited to steel. Korea’s flagship exports, including steel and autos, now face 25 to 50 percent duties in the U.S. market, and Korea’s import share there has slipped. KITA data show Korea’s U.S. import market share ranked 10th at 3.7 percent from January to July, down from seventh at 4 percent a year earlier — the lowest since records began in 1988.

A larger concern is the direction of global trade policy. Korea–U.S. tariff talks have stalled, leaving Korean firms exposed to higher rates, while countries that have reached deals — including Japan and some European countries — face much lower duties. That gap puts Korean exporters at a disadvantage. Other governments are also tightening barriers. Mexico said last month that it would impose tariffs of up to 50 percent on countries without a free trade agreement. For an export-driven economy like Korea, the room to maneuver is narrowing.

Global trade rules are being rewritten, and the front line now stretches beyond the United States to Europe and beyond. Seoul needs to marshal diplomatic resources for tariff talks with Washington and Brussels while moving quickly on industrial policy to bolster firms’ competitiveness. Companies must keep investing in innovation and research to defend performance gaps that differentiate Korean products. Public and private sectors should coordinate on market and product diversification to spread risk and secure new demand.

In doing so, policy and corporate responses should avoid emotional reactions. A measured interest-first strategy — in negotiation and in industrial upgrading — will be essential as the trade landscape hardens.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.