The two children would be half-cousins to each other.
Let's break it down:
Child of Dad and Stepmom: This child is the half-sibling of Dad's child from a previous relationship (let's call this child "Son") because they share one biological parent (Dad) but have different mothers.
Son and Stepmom's child: The child of Son and Stepmom would be the half-sibling of Dad and Stepmom's child because they share the same mother (Stepmom) but have different fathers.
Since the two children have one common biological grandparent (Dad) but different biological parents, they are half-cousins. This means they share one set of grandparents (Dad and Stepmom) but not the other set of grandparents (Son's biological mother's parents).