Korea eyes 'K-Steel Act' to rescue industry from tariffs, China glut

Korea Herald

2 days ago

Bipartisan bill aims to create presidential committee for master planning, offer financial support for next-gen steelmaking tech
Korea is launching an aggressive policy push to rescue its steel industry from mounting global pressure, unveiling a bipartisan bill aimed at helping domestic producers hit hard by a 50 percent US tariff and a surge of low-cost Chinese products.
Announced Monday by 106 lawmakers from both ruling and opposition parties, the proposed "K-Steel Act" outlines a long-term industrial strategy that frames steel as a vital base for national security and economic resilience.
'Korea's steel industry has grown rapidly since 1970. But today, it faces an unprecedented crisis, caught between the global push for carbon neutrality, a flood of cheap Chinese imports and steep tariffs from key trading partners,' lawmakers said in explaining the purpose of the bill.
They warn that failure to act would leave Korea exposed on multiple fronts. A shrinking domestic steel base could ripple across its broader industrial ecosystem, threatening other sectors from shipbuilding to electric vehicle development.
'This bill is about both survival and transformation,' said Rep. Eoh Kiy-ku of the ruling Democratic Party of Korea and co-chair of the National Assembly Steel Forum. 'With bipartisan support, we plan to pass this quickly and follow up with additional legislation if needed.'
Steel remains a pillar of Korea's manufacturing economy, accounting for 4.8 percent of national output and supporting more than 430,000 jobs.
But that foundation is under threat.
Despite a recent Korea-US tariff deal lowering duties on most goods to 15 percent, the US will maintain a 50 percent tariff on Korean steel.
At the same time, the European Union's Carbon Border Adjustment Mechanism, set to launch next year, will impose extra costs on Korean steelmakers exporting to the EU unless they decarbonize fast.
Korea's push comes as other major economies, including the US, EU and Japan, have already begun ramping up public support for their own steel sectors.
From the US Inflation Reduction Act to EU climate subsidies, governments are blending industrial policy with climate action in a bid to secure supply chains while hitting net-zero targets.
What's in the bill?
The K-Steel Act lays out a comprehensive policy framework that would give the government a more direct role in shaping the industry's future.
Central to the proposal is the creation of a presidential committee tasked with crafting five-year master plans and annual action roadmaps to steer the steel sector through economic and environmental challenges.
To support the industry's green transition, the bill includes a wide range of financial incentives.
These include subsidies, low-interest loans, tax breaks and production cost support for companies investing in hydrogen-based and other low-emission technologies.
It also introduces 'green steel zones' -- designated areas where permitting and regulatory processes would be streamlined to encourage investment and innovation.
The legislation also strengthens Korea's defensive trade measures. It calls for tighter rules of origin, curbs on low-quality steel imports and expanded authority for the government to counter unfair trade practices.
In cases where market-driven restructuring proves insufficient, the government would be authorized to step in with financial and regulatory support, including temporary exemptions from antitrust laws for mergers deemed necessary to stabilize the industry.