The End of a 10-Year Low-Price Offensive: Why Korea Imposed 33% Tariffs on Japanese and Chinese Steel
On February 23, 2026, the Korean government decided to impose anti-dumping duties of up to 33.43% on hot-rolled steel plates from Japan and China. The measure aims to protect domestic industry from foreign steel sold at over 10% below normal prices and expects an annual production increase of 1 million tons.
February 23, 2026 marked a turning point for Korea's steel industry after 10 years. The Korean government officially decided to impose anti-dumping tariffs of up to 33.43% on hot-rolled steel plates (less than 3mm thick) from Japan and China.[1]
TL;DR
- Tariff rates: 31.58~33.43% for Japanese products, 28.16~33.10% for Chinese products, applied for the next 5 years
- Background: Erosion of domestic steel market share through low-price offensive (sold over 10% cheaper)
- Effect: Expected annual shipment increase of 1 million tons for domestic steel companies, market share recovery of 8.9%p[2]
- Exception: 9 companies (81% of import volume) can be exempted from tariffs by promising price increases
- Context: Self-defense measures amid the spread of global protectionism
What Happened: Evidence of 10 Years of Dumping
The Korea Trade Commission (KTC) analyzed import data from 2022~2024 and determined that Japanese and Chinese steel companies had been dumping surplus production from their domestic markets into Korea at over 10% below normal prices.[3]
Key Figures
| Item | Details |
|---|---|
| Target Product | Hot-rolled steel plates (less than 3mm thick, raw material for cold-rolled and galvanized steel plates) |
| Anti-dumping Tariff | Japanese: 31.58~33.43% / Chinese: 28.16~33.10% |
| Application Period | February 2026 ~ 2031 (5 years) |
| Existing Tariff | 0% (FTA and other trade agreements) |
| Exception | 9 companies exempted from tariffs by promising export price increases[4] |
Why Now: Korean Steel Under Triple Pressure
1. China's Low-Price Offensive
Since 2020, China's steel industry has redirected surplus production to exports due to weak domestic demand, and Korea became a primary target due to geographical proximity. Korea's imports of hot-rolled steel from Japan and China averaged over 2 million tons annually from 2022~2024, continuously eroding domestic steelmakers' market share.
2. US Tariff Barriers
With the Trump administration's steel tariffs (including recent 15% reciprocal tariff controversy) blocking Korean steel exports to the US, domestic companies like POSCO and Hyundai Steel became more dependent on the domestic market. But even that domestic market was being taken over by foreign products.
3. Global Protectionist Trend
As countries moved to protect their domestic industries in 2026, Korea judged that it "can no longer unilaterally remain open." Precedents include the Philippines' ceramic tile safeguards and the EU's tariffs on Chinese electric vehicles.
Who's Involved: Stakeholder Landscape
Beneficiaries
- POSCO, Hyundai Steel and other domestic steel producers
- 1 million ton annual production increase → job retention and facility utilization improvement
Losers
- Japan's JFE Steel, Nippon Steel / China's Baosteel, etc.
- Reduced export volume to Korea or forced price increases
Neutral Impact
- Automobile, shipbuilding and other steel-consuming industries
- If 9 companies accept price increase promises, import prices will inevitably rise, but lower than tariffs
- Supply chain stability improves with increased domestic sourcing
How Long Will It Last: 5 Years vs. Global Trade Conflict
Short-term (1~2 years)
- Possibility of WTO litigation by Japanese and Chinese companies
- Domestic steel company production and profitability recovery becomes visible
- Cost pressure on automobile, shipbuilding and other demand industries
Medium to long-term (3~5 years)
- Possibility of Chinese retaliation (anti-dumping investigation of Korean products)
- Whether global steel overcapacity is resolved will determine tariff continuation
- Whether Korean steel upgrades technology (transition to high-value products) is key
Durability Assessment: Medium-term (1~3 years)
While the tariff itself applies for 5 years, possibilities for both early termination or extension remain open depending on WTO litigation and retaliation from China and Japan, and changes in global steel supply and demand.
Derivative Issues: The Paradox of Protectionism
1. Tariffs Are Not a Panacea
Anti-dumping tariffs can recover short-term market share, but long-term survival is impossible without fundamental competitiveness improvement. While POSCO is already transitioning to high-value products like high-strength steel and electrical steel for electric vehicles, China still dominates the low-to-mid-price commodity product market.
2. Double Burden on Demand Industries
From the perspective of automobile and shipbuilding companies, raw material price increases are inevitable. Even if the price increase promises from 9 companies are accepted, there's a high possibility of passing costs on to final consumer prices.
3. Chain of Trade Retaliation
China is already conducting anti-dumping investigations on Korean petrochemicals and battery materials. This measure could provide grounds for retaliation.
Risk Checklist
- WTO Litigation Risk: 🟡 Medium (Possibility of litigation from Japan and China, but sufficient dumping evidence)
- Retaliation Risk: 🟡 Medium (Possibility of Chinese anti-dumping investigation of Korean products)
- Cost Increase Risk: 🟢 Low (Cushioned by 9 companies' price increase promises)
- Supply Chain Disruption Risk: 🟢 Low (Can substitute with increased domestic production)
- Political Risk: 🟡 Medium (Possibility of deterioration in Korea-Japan and Korea-China relations)
Reference Links
- Chosun Ilbo English Edition: South Korea Imposes 33% Anti-Dumping Duties
- Korea JoongAng Daily: KTC recommends accepting price increases
- Yonhap: KTC trade remedy announcement
- Korea Economic Daily: Screams over cheap Chinese products
- KED Global: S.Korea to slap anti-dumping duties
Image Sources
Images Not Available: Internal materials from the Korea Trade Commission and steel industry are inaccessible due to access restrictions. Photos from steel production sites are difficult to obtain in real-time due to corporate security policies, and Trade Commission announcement materials cannot be used until official distribution. Content has been composed with tables and figures in the text as substitutes.