EU tackles cheap steel imports

Increased tariffs and lower quotas for steel imported into Europe are being planned by the EU next year.

The European Commission has unveiled a legislative proposal in response to pressure from some member states and their steel industries, which have been struggling to compete with cheap imports from countries such and China and Türkiye.

The EU is proposing to reduce tariff-free quotas for imports to 18.3 million tonnes a year, a 47% reduction from 2024 levels. The new measures would come into force early next year but will first need to be approved by member states and the European Parliament.

The quotas will be allocated per product category based on the share of imports thatproduct held during 2022-24. If necessary, the Commission may implement country-specific quotas or restrictions. Once these quotas are exhausted, a 50% tariff will apply, up from the current 25%. The measures will require importers to declare the country of ‘melt and pour’ origin, verifying where the steel was originally produced in liquid form to prevent circumvention.

Lost jobs

‘We have global over-capacity, unfair competition, state aid, and undercutting in prices and we are reacting to that,’ said Stéphane Séjourné, the European Commission’s executive vp for prosperity and industrial strategy, told a news conference in Strasbourg. ‘Eighteen thousand jobs were lost in the steel sector in 2024. That’s too many, and we had to put a stop to that.’

The move has shocked steel-makers in the UK as the EU is the UK’s most important export destination for steel, worth nearly £3 billion (EUR 3.5 billion) and representing 78% of steel products going to overseas markets.

It comes after a proposed deal to eliminate tariffs on UK steel exports to the US was put on hold indefinitely in September. Meanwhile, Chinese-owned plants in Scunthorpe were taken over earlier in the year and Liberty Steel plants in Rotherham and Stocksbridge collapsed into government control in September.

The UK Government is hoping for special dispensation although it is now outside the EU following ‘Brexit’.

Assessment

The Commission will assess the proposed regulation within two years of its adoption. If necessary, it will consider making a legislative proposal to add additional steel products, including those made of or containing a significant amount of steel. In addition, the Commission shall evaluate the effectiveness of the regulation before 1 July 2031 and every five years thereafter.