○ Amid complex megatrends—including global economic slowdowns, escalating geopolitical risks, and digital & green transitions—the free trade and globalization-centric order is weakening, ushering in the era of economic security in earnest.

• Supply chain resilience, securing advanced technologies, and strengthening industrial competitiveness have emerged as central imperatives. Trade and industrial policies are now organically coupled, with governments actively leading industrial development and competitiveness enhancement.

○ While the economic security value of steel—as a foundational core industry and a backbone for advanced sectors—is being re-evaluated, concerns over losing domestic production bases are intensifying due to deepening overcapacity and a surge in imported products.

• In 2025, global crude steel capacity reached approximately 2.45 billion tons, exceeding demand (1.80 billion tons) by 650 million tons (36%), with overcapacity projected to reach 740 million tons by 2028. China's steel exports reached 130 million tons in 2025, topping 100 million tons again for the first time since 2016.

○ Consequently, advanced nations where the steel industry has reached maturity are taking active steps to secure domestic production capabilities—defending "Steel Sovereignty"—and driving a shift in the global policy paradigm.

• Countries including the U.S., EU, and UK view domestic manufacturing capacity as directly linked to manufacturing competitiveness and economic security, aggressively pursuing strategic industrial policies that encompass subsidies, energy, carbon, and trade measures.

• Recent characteristics of the shifting global steel policy paradigm include:

  • 1. [Strategy] Transitioning from short-term defensive measures (against overcapacity and import surges) to national-level mid- to long-term strategies.

  • 2. [Objective] Expanding beyond simple industry protection toward rebuilding manufacturing and fostering advanced industries to secure future competitiveness.

  • 3. [Stance] Moving away from a dichotomous structure (advanced nations using trade remedies vs. emerging nations using subsidies) as advanced nations return to proactive industrial policies.

  • 4. [Tools] Organically linking and utilizing diverse policy instruments, including tariffs, subsidies, energy, carbon, and public procurement policies.

  • 5. [Intensity] Escalating government intervention beyond addressing market failures to maintaining production capacity, driving decarbonization, and considering nationalization.

○ Entering the era of steel sovereignty, South Korea must also re-evaluate the strategic value of steel from the perspectives of economic security and future manufacturing competitiveness, adopting a more long-term and strategic approach.

• Policy directions need to be redefined to treat steel not merely as a "traditional industry," but as a "national strategic industry," framing policies around "Steel Sovereignty" with a focus on securing stable production bases and supply chains.

○ Crucially, as future global steel competition is highly likely to shift from firm-level rivalries to inter-state industrial ecosystem competition, strengthening joint public-private response systems and executing effective policies will be vital.

• Enterprises must recognize steel as an axis of future manufacturing competitiveness, focusing all efforts on developing high-value-added materials, stabilizing supply chains, securing next-generation steel technologies, and executing the low-carbon transition.

• The government and industry must jointly chart sustainable development paths centered around the "K-Steel Act," collaborating to establish effective follow-up mechanisms and support policies.