As global protectionism intensifies, Korea’s steel industry finds itself at the center of two major trade challenges. The U.S. has imposed steep tariffs, while Vietnam — one of Korea’s fastest-growing export markets — has initiated anti-dumping measures. For an economy built on high-value manufacturing and export resilience, this double hit underscores the shifting landscape of global trade that Korea must now navigate.

Trade Pressures Mount on Korean Steel Exports

According to data from the Korea International Trade Association (KITA), Korea exported USD 1.45 billion worth of steel to Vietnam between January and October 2025, marking a 13.8% increase compared to the same period in 2023. Vietnam is now Korea’s sixth-largest export destination for steel, driven by demand across automotive, construction, machinery, and consumer electronics industries.

Major Korean producers such as POSCO and Hyundai Steel have relied on Vietnam as a key growth market, especially as exports to the United States plummeted under the weight of 50% high tariffs imposed earlier this year. To offset losses, many firms began redirecting shipments to Southeast Asian markets including Vietnam, Indonesia, and Malaysia.

However, this strategy is now being tested. Vietnam’s Ministry of Industry and Trade has introduced anti-dumping duties of up to 15.67% on certain Korean galvanized steel products, citing harm to its domestic steel sector. The move follows a broader trend of emerging economies erecting defensive trade barriers as global steel oversupply intensifies.

Vietnam’s Rising Industrial Protectionism

Vietnam’s actions reflect a policy shift toward protecting its domestic manufacturing base amid growing import volumes. The country has increasingly positioned itself as both a production hub and a consumer of industrial materials, and the surge of competitively priced Korean steel has triggered policy backlash.

The situation highlights the paradox of Korea’s regional integration efforts — while the Korea-Vietnam Free Trade Agreement (FTA) has deepened bilateral commerce, anti-dumping measures show that industrial competition is now emerging within the very trade frameworks designed to enhance cooperation.

In response, Korea’s Ministry of Trade, Industry and Energy (MOTIE) convened the 9th Korea-Vietnam Trade Remedies Cooperation Meeting and the 10th Korea-Vietnam FTA Trade Remedies Committee in Da Nang. Officials urged Vietnam to review its measures carefully, emphasizing that many Korean steel exports are high-value materials essential for Vietnam’s industrial development.

Industry Concerns Over Profitability

Korean steelmakers warn that if the anti-dumping measures remain in place, export volumes and profit margins could decline sharply. A senior industry official noted that prolonged tariffs would “erode Korea’s price competitiveness and slow down regional supply chain recovery.”

Government officials have also expressed growing concern about the compound effect of protectionist actions. With U.S. tariffs already constraining major export routes, and Vietnam introducing regional restrictions, Korean manufacturers face shrinking options for diversification — a worrying signal for other export-heavy sectors, including semiconductors, batteries, and industrial materials.

Trade Resilience and Industrial Strategy

The dual shock facing Korea’s steel industry extends beyond trade friction. It reflects a broader structural challenge for Korea’s manufacturing-driven economy — how to sustain competitiveness amid rising geopolitical and industrial protectionism.

Steel remains a critical input for deep-tech manufacturing, construction, and mobility industries, meaning disruptions in export flow could cascade across Korea’s industrial value chain. The situation also underscores the need for Korea to diversify export dependencies and accelerate regional industrial partnerships beyond traditional markets.

Recent progress under the Korea–U.S. Joint Fact Sheet adds contrast to this development. While the agreement secures tariff clarity for autos, semiconductors, and pharmaceuticals, steel remains outside its scope, leaving the sector more exposed to global trade volatility.

This divergence underscores how Korea’s industrial diplomacy is gradually shifting focus toward technology-intensive exports while legacy manufacturing faces prolonged trade headwinds.

In the long run, stronger integration through the Regional Comprehensive Economic Partnership (RCEP) and bilateral frameworks may offer new stability, but such mechanisms require continuous diplomatic calibration to prevent trade conflicts from undermining industrial cooperation.

Korea’s Path Through Trade Headwinds

Korea’s steel industry now stands as a barometer of how global protectionism reshapes Asia’s supply chains. The country’s ability to defend its industrial interests through strategic diplomacy, while advancing trade diversification and sustainability, will determine how resilient its manufacturing ecosystem remains in the coming decade.

As U.S. tariffs and Vietnam’s measures test Korea’s export model, the government’s evolving trade strategy — balancing defense with dialogue — will be crucial not only for steelmakers but for the broader ambition of keeping Korea’s industrial economy globally connected and competitive.

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