New safeguard measures against steel imports: all the latest changes

Following numerous submissions and requests, a few months ago the European Commission (EC) started a review of the tariff rate quotas on steel products, that culminated into the release of a new document on June 29, 2020.

These tariffs have been implemented to protect the European Union from the threat of increased import volumes, partly as a consequence of the US steel tariffs. The previous measures - originally introduced in February 2019 - provided for a system of tariff-rate quotas, (TRQs) for 26 steel products categories, set at a threshold that would ensure and preserve traditional levels of imports from trading partners. Import exceeding the set TRQs were - and still are - subject to an out-of-quota tariff of 25%.

One year later, in February 2020, the European Commission began working on these measures once again to make some tweaks as requested by an increasing number of companies and trade associations. The updated document was issued on June 29, 2020.

However, it looks like it fell short of expectations: despite a 50% drop in European steel demand since March due to the Covid-19 pandemic, annual quota volumes will not be reduced. Quite the contrary, the EC has already announced that the TRQs will be further increased by 3% as established in an earlier revision.

Eurofer (the European Steel Association) and the IndustriAll European Trade Union have expressed their deep disappointment with this decision."This is the worst crisis we have seen in decades [...] This may risk thousands of jobs and could cost taxpayers billions", said Luis Colunga, Deputy General Secretary of IndustriAll, calling for an emergency meeting with European policymakers.

Despite the devastating effects of the pandemic are in the public eye, "the tariff-free import quota has been further raised. Objectively, this makes no sense. [...] The resulting marginal technical changes may help one or other steel product groups but most of our industry has been left in the cold”, stated Axel Eggert, General Director of Eurofer.

Ostensibly, the reason behind this choice is to ensure that the European market will stay well supplied with import material. As mentioned in the European Commission document, most of the 200 submissions made by exporters, importers, users, and traders strongly opposed the request to drastically reduce the volume of tariff quotas.

For more details on all the new provisions and expectations on what the possible consequences on the European market will be, we invite you to have a look at this interesting analysis carried out by our friends of CRU >>

Photo by worldsteel / Jeff Swensen