 |
| k steel act |
Bipartisan “K-Steel Act” Targets Tariffs, Chinese Imports, and Green Transition Challenges
South Korea’s steel industry faces rising global pressure from tariffs, Chinese oversupply, and carbon-neutral policies. In response, 106 South Korean lawmakers jointly proposed the K-Steel Act—a strategic bill to safeguard domestic steelmakers and reinforce industrial sovereignty. The bill reflects urgent concerns over the sector’s survival, given ongoing 50% US tariffs and surging imports of low-cost Chinese steel.
The proposed legislation treats steel as a national strategic asset, essential to both economic stability and national security. It mandates the creation of a presidential committee to draft five-year master plans and annual roadmaps. Regulatory reforms and financial aid aim to support green steel innovation, including hydrogen-based technologies.
Stronger Trade Protection and Green Steel Incentives
The bill includes sweeping protective trade measures. It tightens rules of origin, limits low-quality imports, and expands state authority against unfair trade. Temporary exemptions from antitrust law will facilitate industry consolidation during restructuring.
Meanwhile, the law proposes “green steel zones,” where regulatory processes will be streamlined for companies investing in low-emission production. Incentives include tax credits, low-interest loans, and subsidies for decarbonization technologies. These tools seek to offset looming costs tied to the EU’s CBAM implementation in 2026.
In contrast to current global trade norms, the act prioritizes steel self-sufficiency over liberalized imports. Lawmakers argue that erosion of steel production risks the broader industrial ecosystem, including shipbuilding, automotive, and EV sectors.
Trade Deal with the US Offers Limited Relief
Despite a recent US-South Korea trade agreement, American tariffs on Korean steel remain high at 15%—lower than the previous 25% proposal but still restrictive. In return, South Korea committed to a $350 billion investment in the US, including $150 billion in joint shipbuilding and $200 billion in high-tech sectors. It also pledged to purchase $100 billion worth of US energy products such as LNG and oil.
As a result, the K-Steel Act may serve as a policy anchor amid these geopolitical trade-offs. Rapid passage of the bill is expected, with legislators open to supplementary laws.
ScrapInsight Commentary
The K-Steel Act signals a structural policy shift, elevating steel from a commodity to a strategic sector. While offering short-term relief, this protectionist approach could provoke global trade disputes. However, without aggressive decarbonization, Korean steelmakers risk losing competitiveness in future carbon-regulated markets like the EU and US.
