EU Announces Introduction of New Tariff Rate Quota System
Steel Import Quotas Halved, Tariffs Raised to 50 Percent
Government to Hold Public-Private Joint Countermeasure Meeting
Direct Consultations Planned with EU Trade Officials
The European Union (EU) has announced plans to introduce a new tariff rate quota (TRQ) system to replace its existing steel safeguard (emergency import restriction) measures, a move expected to significantly impact South Korea's steel exports to the EU. The EU has signaled strong protectionist measures, including nearly halving steel import quotas and doubling tariffs on volumes exceeding the quota.
According to the Ministry of Trade, Industry and Energy on October 8, the EU's draft TRQ for 2026 reduces the quota to 18.3 million tons, a 47% decrease from the 2024 safeguard level of approximately 30.53 million tons. At the same time, the tariff rate applied to volumes exceeding the quota will be raised from the current 25% to 50%. The EU will also introduce a 'melt & pour' standard for all steel imports, strengthening the requirement to prove the country of production. This is interpreted as a measure to block indirect exports via third countries.
This system will undergo the EU's standard legislative process and is expected to be implemented no later than the end of June 2026, when the current safeguard measures expire, pending a vote by member states. However, industry observers note that early adoption is possible within the first half of next year.
The South Korean government is closely monitoring the potential impact of these measures on domestic steel exports and has begun to formulate a response. The Ministry of Trade, Industry and Energy noted that although the country-specific quota allocations have not yet been finalized, a 47% reduction in the total quota could deal a significant blow to South Korea's steel exports to the EU, which are valued at approximately 4.5 billion dollars.
Since the EU has specified that it will consider free trade agreement (FTA) partners when allocating quotas by country, the ministry plans to request that this be fully reflected during negotiations. To this end, Yeon Han-koo, South Korea's Trade Minister, will seek a separate meeting with Maros Sefcovic, the EU's Executive Vice-President for Trade, to directly convey the Korean government's position and concerns.
The ministry will also conduct on-site inspections to minimize short-term export losses and prepare mid- to long-term countermeasures. Moon Shinhak, the First Vice Minister of Trade, Industry and Energy, plans to visit major steel exporters this week to hear their concerns directly.
In addition, the ministry's Director-General for Industrial Supply Chain Policy will preside over a "public-private joint countermeasure meeting" on October 10 to begin formulating a "steel industry advancement plan." The meeting will be attended by major steelmakers such as POSCO, Hyundai Steel, and Dongkuk Steel, as well as representatives from the Korea Iron & Steel Association and Korea Trade Insurance Corporation, to discuss comprehensive response strategies to the EU's new TRQ measures.
The steel industry is concerned that the EU's new measures, combined with the 25% reciprocal tariffs imposed by the United States, will further increase the burden on exports. In particular, the introduction of the melt & pour standard is expected to increase administrative costs and cause delivery delays due to stricter rules of origin verification. An industry representative stated, "The EU's quota reduction and tariff increase are not just trade barriers but complex regulations that also include production site restrictions. The government should actively leverage its FTA partner status to secure exemptions."
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