Amid EU Steel Restrictions and Mexico Tariff Pressure... Government Launches Comprehensive Trade Response

Director General Han-Koo Yeo Voices Concerns over Steel TRQ to the EU
FTA and Tariff Incentive Discussions Held in Mexico

Trade Negotiations Director General Yeo Hangoo departing. Photo by Yonhap News

As the European Union (EU) moves to strengthen steel import restrictions and tariff risks from Mexico grow simultaneously, the Korean government has launched comprehensive trade outreach efforts targeting EU steel trade negotiations and the promotion of a Korea-Mexico Free Trade Agreement (FTA).

On May 11 (local time), Han-Koo Yeo, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy, met with Maros Sefcovic, European Commissioner for Trade and Economic Security, at the European Commission headquarters in Brussels, Belgium. Yeo conveyed the concerns of the Korean industry regarding the EU’s steel import restriction measures.

Starting in July, the EU plans to implement the “Steel Excess Capacity Act,” which includes tariff hikes and the introduction of tariff-rate quotas (TRQ) on 30 steel products. Director General Yeo requested that the EU take a cautious and cooperative approach to ensure that Korean steel products are not subject to unfair restrictions under the new regulations.

In particular, the government emphasized that these measures would not be limited to the steel industry alone but could expand to issues such as supply chain stability and production disruptions for Korean companies operating local manufacturing bases in the automotive and home appliance sectors. The EU acknowledged that the steel industry is strategically important for both Korea and the EU, and proposed seeking mutually beneficial solutions through future high-level and working-level consultations.

Earlier, on May 10, Director General Yeo held a meeting with Korean companies operating in the EU to assess challenges faced by the steel, automobile, and battery industries. Participating companies expressed that management burdens are increasing due to the EU’s stricter regulatory measures, such as the Industrial Acceleration Act (IAA) and the Carbon Border Adjustment Mechanism (CBAM). They voiced particular concern that the steel import restrictions scheduled for implementation in the second half of this year could extend cost burdens across downstream industries, including automobiles and home appliances.

Korean battery manufacturers operating in Poland evaluated positively the EU’s decision to include the battery industry as a recipient of support for “energy-intensive industries,” expecting relief from electricity costs and reductions in manufacturing costs. The government explained that it has continuously raised the need to support the battery industry in consultations with the European Commission and the Polish government.

Director General Yeo then visited Mexico from May 12 to 13 to conduct outreach with government, political, and business leaders for the promotion of a Korea-Mexico FTA. Yeo met with Mexico’s Minister of Economy, Marcelo Ebrard, delivering feedback from Korean companies operating in Mexico regarding difficulties caused by tariff increases on countries without FTAs and requesting swift resolution. He specifically called for the stable operation of the current tariff exemption system, an expansion of duty-free quotas for automobiles, and the introduction of new quotas for home appliances. Additionally, during the review of the USMCA (United States-Mexico-Canada Agreement), he conveyed Korean companies’ concerns regarding rules of origin.

Both countries agreed on the need to improve trade and investment relations and decided to establish a ministerial-level strategic dialogue and a working-level task force. The government aims to use this as momentum to advance discussions on the Korea-Mexico FTA.

During meetings with Korean companies and members of Mexico’s business community, the government strongly highlighted the necessity of the Korea-Mexico FTA. Companies emphasized that uncertainties are increasing due to Mexico’s tariff hikes, Section 232 tariffs under the U.S. Trade Expansion Act, the USMCA review, and the strengthening of labor laws, stressing the need for an FTA as a fundamental solution.

Director General Yeo stated, “Amid an uncertain trade environment, the government is actively pursuing diversification policies,” and added, “We will provide strong support for Korean companies by expanding tariff reduction incentives and pursuing an FTA with Mexico, Korea’s top trading partner in Latin America.”

This content was produced with the assistance of AI translation services.