EU tariffs accelerate Korean tire makers' China exit
Hankook, Kumho, Nexen on path to expand local production in Europe
Hankook Tire's manufacturing plant in Clarksville, Tenn. / Courtesy of Hankook Tire
The European Union's latest anti-dumping tariffs on Chinese-made tires are poised to accelerate a strategic realignment across Korea's tire industry, prompting local manufacturers to curb their production reliance on China as geopolitical risks increasingly reshape global supply chains.
Under the latest regulatory measure, Hankook Tire received an anti-dumping duty of 4.3 percent, while Kumho Tire and Nexen Tire were each hit with a 24.4 percent levy. The effective tariff burden rises to 8.8 percent for Hankook and 28.9 percent for its domestic rivals, after calculating the EU’s existing 4.5 percent import tariff.
The disparity reflects years of divergent manufacturing strategies rather than differences in product competitiveness.
Hankook Tire established a substantial European manufacturing base through its plant in Hungary, allowing it to supply much of the region's demand locally despite maintaining three production facilities in China. The firm's strong regional production network has significantly reduced its exposure to the new trade measures from the EU.
Kumho Tire, by contrast, has yet to operate a manufacturing plant in Europe, and relies hugely on its three Chinese plants for exports to Europe. The company is accelerating the construction of its new European plant in Poland to minimize any unexpected geopolitical risks. The factory is scheduled to begin operation in 2028.
Nexen Tire's manufacturing facility in Zatec, Czech Republic / Courtesy of Nexen Tire
Nexen Tire has also been moving to reduce its dependence on Chinese production by expanding operations at its plant in Zatec, Czech Republic. The company recently expanded its automated logistics warehouse to strengthen regional supply capabilities and has steadily lowered the proportion of products sourced from China, as part of its revamped supply chain diversification strategy.
The tariff decision is widely viewed as a catalyst for broader restructuring across the Korean tire industry, with manufacturers increasingly shifting production closer to major end markets in Europe and North America, as geopolitical uncertainties surrounding China continue to mount.
The challenge comes as the industry is already facing mounting cost pressures. Prices of key raw materials, including natural and synthetic rubber, have climbed in recent months, while elevated ocean freight rates, driven by heightened geopolitical tensions in the Middle East, have further squeezed the tire makers' profitability.
Kumho Tire's plant in Vietnam / Yonhap
“For the Korean tire firms, production location is becoming as important as product quality itself in their key export markets, such as Europe and the U.S., due to growing protectionism,” an official from the industry said.
"The EU's recent tariff imposition will accelerate a fundamental restructuring of Korean tire firms’ global manufacturing and supply chain strategies.”