In addition to the initial goal of reducing steel imports to the EU at low prices, the new trade measures proposed by the European Commission can be seen as a signal to the United States that the EU wants to implement the idea of creating a closed steel trade club between the United States and the EU, Kallanish notes.
This happened after negotiations between the EU and the US on the Global Agreement on Sustainable Steel and Aluminum Production (GASSA) during Joe Biden's presidency were abruptly interrupted by the Trump administration's reintroduction of Section 232 tariffs. In July, the EU and the US agreed to reduce some tariffs on steel imports from the EU to the US, but steel duties remain at 50%.
On Tuesday, it announced its proposal to cut duty-free steel quotas by almost half and raise non-quota tariffs to 50%. The European Commission did not fail to point out that it "shares many of the concerns of the United States in this sector."
In her Q&A regarding the new measures, she notes: "Both sides are aware of the importance of addressing the negative trade-related effects of global overcapacity. The European Union stands ready to work with like-minded countries to protect their economies from global overcapacity, while ensuring the reliability of supply chains and expanding market access between them. We will continue to explore ways to work together with the United States to achieve a successful outcome."
Any future trade agreement may include other "like-minded" countries, such as the United Kingdom, whose steel industry fears that the new EU trade measures represent an "existential crisis" (see Kallanish passim).
However, any agreement must have a reasonable purpose in order to avoid trade tensions with other trading partners. While GASSA's main focus has been on environmentally friendly steel, it's hard to imagine that the Trump administration will prioritize this approach. It is more likely that the focus will be on economic security in the context of global fragmentation.
Responding to concerns about the legality of the new trade measure, the Commission said that a WTO member could take legal action, such as increasing its tariff obligations under the WTO, in accordance with the rules of Article XXVIII of the GATT. However, other countries may be entitled to compensation or retaliation.
"Stakeholders, including third-country governments, were invited to express their views on the EU proposal, but only a few countries took advantage of this opportunity. Of those who have done so, several have recognized the expediency of the EU taking measures against excessive
