EU Doubles Tariffs on Steel Imports
The EU Commission has announced that it will double its tariffs on steel imports above a duty-free quota to 50%. The quota itself is to be reduced by 47% to 18.3 million tonnes per year. This decision is part of efforts to combat global overproduction and a slump in European production that has led to a third of the bloc’s steel production capacity being shut down.
Background
The EU steel industry’s plight is largely attributed to China dumping excess supply onto the European market at cheaper prices. The industry has shed nearly 100,000 jobs over the past 15 years. The European Steel Association (EUROFER) welcomed the new policy, calling it a "lifeline" for the bloc’s steel industry.
Reaction from China
China quickly hit back, calling the EU Commission’s steel tariffs a "protectionist move." The Chinese Chamber of Commerce in the EU (CCCEU) said that this move signals a worrying rise in trade protectionism within the EU market. However, the EU says higher tariffs only target excess quantities, while still providing a steel quota that is not subject to higher duties.
EU Steel Levy a Protectionist Measure?
The EU argues that the new policy is in line with World Trade Organization (WTO) trade rules. The industry group argues that the EU would introduce a "tariff quota system that allows a reasonable amount of imports to enter Europe duty-free." This quota of 18.3 million tonnes of duty-free steel imports reflected market conditions in 2013 “before the first wave of the Chinese steel glut.”
Brussels Asks Trump for Concessions?
The EU tariffs follow a similar increase in steel tariffs by the Trump administration earlier this year. EU Trade Commissioner said that Brussels had decided to do things "our European way," which meant "keeping European markets open" and "offering quotas to our partners." The EU is hoping for concessions from the US, with EUROFER saying that the new provisions will lay the foundation for renewed dialogue with the Trump administration to lift tariffs.
Impact on Other Countries
The new EU tariffs will be felt in the UK and beyond. With around 80% of Britain’s steel exports going to the EU, making the bloc the largest market for British steel, "loss of access to this market would have a catastrophic impact on British jobs." Another major steel producing country that will suffer from the new EU tariffs is India. About 3.3 million tonnes, or 60% of India’s total steel exports, went to the bloc in 2024.
Future Negotiations
The EU is currently negotiating a free trade agreement, and an Indian delegation is expected in Brussels this week. The taxation of Indian steel imports under the EU’s comprehensive import carbon emissions rules is already a major point of contention. There is a possibility that Britain will be included in efforts to shield Chinese exports. However, such a policy could harm the EU’s relations with other steel producers.
