Processing industries are questioning the EU's commitment to protecting steel producers
Industry associations and market participants fear that the European Commission's proposed replacement of import safeguards could cause lasting damage to steel-consuming companies and EU producers.
According to the plan, the volume of duty-free quotas will be reduced by 47% or more - starting from July 1, 2026, tariffs on quotas have doubled to 50%. If the new trade protection mechanism is approved, it will also require importers to disclose information about the location of all materials from third countries and cancel the transfer of unused quotas for steel imports from one quarter to the next.
European Commission Executive Vice President Stephane Sedgerne announced the details of the measures at a press conference on October 7. He said the changes were necessary to protect the EU steel industry from a global oversupply of steelmaking capacity. According to forecasts, by 2027 this figure will reach 721 million tons, which is five times higher than the current level of consumption in the EU.
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Tightening import quotas in the region and bringing its above-quota tariff rate in line with that of the United States could also benefit the EU's trade negotiations with the United States. The UK is currently the only country negotiating a reduction in the Section 23.25% import tariff on steel.
Mixed reaction to the European Commission's trade protection proposal
Eurofer called the trade protection measures proposed by the Commission "a real lifeline for EU steel producers and metallurgists." Others criticized the plan.
In the UK, the UK Steel trade organization called the proposed EU tariffs a real threat to the country's steel industry. Last year, 78% of the steel produced in the UK was exported to the EU. The CEO of UK Steel said that the UK should receive from the European Commission a quota for steel imports for a specific country, otherwise "a catastrophe could potentially occur."
EU steel importers, warehouses and end users have also criticized the plan. The future prices of the steel they import are currently unknown due to a lack of clarity regarding CBAM fees. They fear that reducing import quotas and increasing duties will lead to further price increases, which could jeopardize their business models. According to the plans, duty-free