EU unveils new trade shield cutting tariff-free steel imports by 47%: industry reactions
The European Commission has unveiled a proposal for a new trade measure designed to better shield the European steel sector against the growing impact of global overcapacity. Announced on October 7, 2025, it marks a key step in delivering the EU Steel and Metals Action Plan, aiming to ensure the long-term competitiveness and resilience of this strategically vital industry.
New trade shield to defend EU steelmakers: how does it work?
The plan intends to introduce a Tariff Rate Quota (TRQ) system that limits tariff-free imports to 18.3 million tonnes of steel per year — a 47% reduction compared to 2024 safeguard levels that are still in use today. The quota corresponds to 2013 market conditions, before the first wave of low-cost Chinese steel exports began flooding the EU.
Any imports exceeding these quotas would be subject to a 50% tariff, double the current out-of-quota rate. In other terms, the EU is aiming to cut almost by half the volume of steel that can enter the European market tariff-free.
The new trade measure also introduces a “Melt and Pour (M&P)” clause, requiring certification of where steel is melted and cast, improving traceability and preventing circumvention of EU trade rules.
According to the Commission, the measure will maintain open trade while addressing distortions caused by global oversupply, particularly from Asia, with a view to safeguarding EU jobs, and supporting the sector in its decarbonization efforts. President Ursula von der Leyen emphasised that “a strong, decarbonized steel sector is vital for the EU’s competitiveness, economic security, and strategic autonomy.”
Once approved by the European Parliament and Council, the new measure will replace the EU safeguard mechanism expiring in June 2026, ensuring lasting protection for European producers, 300,000 direct workers, and about 2.5 million indirect jobs.
Steelmakers associations have largely welcomed the initiative, though with differing emphases.
Eurofer: a lifeline for the steel industry
The European Steel Association (Eurofer) described the Commission’s proposal as a “major leap forward” for the sector. Director General Axel Eggert praised the measure, saying:
“It constitutes clear evidence that the Strategic Dialogue on Steel, initiated by President von der Leyen, is starting to bear fruit. This trade measure is vital to preserve not just the sector and its workforce, but the very backbone of EU industrial independence and green transition.”
Eggert noted that EU steel plants are running at only 65% of capacity, far below the sustainable 80–85% level. He said the new system could help restore balance, prevent further closures, and create the stability needed for decarbonization, urging swift approval so it can take effect in early 2026. He added that achieving a successful transition will also require full implementation of the other pillars of the Steel and Metals Action Plan — including measures on energy prices, lead markets for European green content, the Carbon Border Adjustment Mechanism (CBAM), scrap exports — and urged EU legislators to adopt the proposal swiftly so it can take effect in early 2026.
Eurofer further underlined the importance of extending similar protection to steel derivatives, which are increasingly targeted by unfair imports and already subject to U.S. tariffs. The association argued that the proposal could serve as a blueprint for protecting Europe’s broader industrial value chains, from machinery to automotive components.
Federacciai reacts: a step forward, but with caution
Italian steel federation Federacciai also commented on the Commission’s proposal, saying that:
“The measure for the steel sector proposed by the European Commission on October 7 finally represents an overall positive step. It is an important move toward a more conscious European industrial policy, capable of protecting the competitiveness and productive stability of our steelmaking system. However, there remains one aspect that raises concern: the reference to the need to discuss these measures with other countries under WTO rules, which would in fact mean negotiating with China on measures conceived to counter its distortive trade practices. This is an issue that should instead be addressed and debated within the European Parliament. The trade shield must also be accompanied by coherent and complementary instruments, such as the introduction of a Buy European clause — ensuring at least 60% European steel in public procurement — and a revision of the CBAM, particularly regarding the abolition of free allowances, which risks creating difficulties for other strategic sectors of the basic industry.”
Dissenting views
While most of the industry has welcomed the European Commission’s new proposal, some market participants have voiced reservations, noting that the measure could push European steel prices higher once implemented. Others criticized the plan as too heavily weighted toward the interests of steel producers, arguing that Europe has an entire steel processing industry reliant on imports that risks being penalized by such strict import limits.
Similar concerns were raised by ACEA, the European Automobile Manufacturers’ Association, which represents the continent’s leading car and truck producers. According to ACEA Director General Sigrid de Vries:
“We do not contest the need for some level of protection for a commodity industry like steel, but we feel that the parameters as proposed by the Commission go too far in ring-fencing the European market. We need to find a better balance between the needs of European producers and users of steel in this measure.”
Next steps and industry outlook
The Commission’s proposal now moves to the ordinary legislative procedure, where it will be examined by both Parliament and Council. If approved, it will come into force as the current safeguard expires in June 2026, ensuring continuous protection for the European steel sector.
In parallel, Brussels will continue working with international partners through the Global Forum on Steel Excess Capacity to address the root causes of overproduction.
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