On June 30, the Ministry of Trade, Industry and Energy announced that the EU Commission had released its operational plan for the new steel measures, which will replace existing safeguards and outline country-specific steel quotas.
The EU's new steel measures will apply a tariff-rate quota (TRQ) system to a total of 18.35 million tons annually, imposing a 50% tariff on any quantities exceeding the quota. Previously, the total duty-free import volume for the EU was 33.82 million tons, which will now be reduced by approximately 46%.
The dedicated quota for South Korea is 2.073 million tons, down from 2.581 million tons. Of this, 2.056 million tons are allocated to 14 steel products that held over 5% market share in the EU from 2022 to 2024, while 16 products with less than 5% market share received 16,342 tons.
The ability of South Korean companies to maintain duty-free exports will largely depend on their success in securing common quotas. In addition to the dedicated quotas, the EU operates common quotas that can be utilized on a first-come, first-served basis with other exporting countries. The common quota for products with over 5% market share is 907,876 tons, while those with less than 5% market share have a common quota of 567,210 tons.
As a result, the South Korean steel industry could theoretically utilize up to 3.548 million tons in duty-free quotas, combining the dedicated quota of 2.073 million tons with the common quota. However, Ye Han-gu, head of the Ministry's Trade Negotiation Bureau, noted, "The common quota operates on a first-come, first-served basis each quarter, and fundamentally, it can only be accessed after exhausting the dedicated national quota. Given the various variables, it is currently difficult to definitively state how much of the common quota our companies will actually be able to utilize."
The government believes that the outcome of these negotiations was influenced by the Korea-EU summit held in June, where steel issues were a key topic of economic discussions, leading to a better understanding of South Korean steel by the EU.
Ye stated, "I understand that Korea was the first to formally raise the steel issue at the summit level. Thanks to the strong momentum provided by leaders at the end of the negotiations, the EU's understanding improved, leading to significant progress in the negotiations."
He also emphasized that South Korea has not faced anti-dumping duties from the EU and has made its own efforts to reduce steel production, highlighting that South Korean steel exports supply the battery and automotive factories of Korean companies within the EU.
However, the government acknowledges that due to varying prices by product and contract terms by company, it is currently challenging to assess the specific impact of these measures. The Ministry plans to monitor the EU's detailed operational regulations and develop response strategies.
Ye concluded, "The EU's detailed regulations for quota operations have not yet been released. We will closely observe the situation and swiftly devise measures to secure as much of the common quota as possible."