The EU Commission announced Tuesday it would double its duties to 50% for steel imports above a a tariff-free quota — with the quota itself planned to be cut by 47% to 18.3 million tons a year. The proposal is subject to approval by the EU’s 27 member states and the European Parliament
The decision comes under efforts to address global overproduction and a slump in European output that has left a third of the bloc’s steel production capacity idle.
But questions are already being raised if the bloc that advertises itself as a paragon of free trade has taken a leaf from US President Donald Trump’s playbook after Brussels matched 50% steel tariffs imposed by Washington earlier this year.
Or is it merely trying to save its domestic steel industry from overcapacity and seek a better deal with the US on European steel exports?
EU’s steel levy a protectionist measure?
The woes of the EU’s steel industry have largely been blamed on China’s dumping of excess supply at cheaper rates on the European market.
But China was quick to hit back and labeled the EU Commission’s steel tariffs a “protectionism step.”
In a WeChat statement cited by Chinese daily newspaper Global Times, the China Chamber of Commerce in the EU (CCCEU) said: “Although China’s steel exports to the EU account for only a modest share of its total global exports, this move nevertheless signals a worrying rise in trade protectionism within the EU market.”
The statement noted further that such a trend “runs counter to the EU’s long-standing commitment to open, rules-based, and predictable trade.”
But the EU says higher tariffs only target excess volumes and still offer a steel quota not subject to higher levies.
The European Steel Association (EUROFER) welcomed the new policy and described it as a “lifeline” for the bloc’s steel industry which has shed nearly 100,000 jobs within the past 15 years.
In a statement, EUROFER said the Commission’s decision was in line with trade rules set by the World Trade Organization (WTO).
The industry group argues “unlike the US tariffs that impose 50% duties on all steel imports,” the EU would introduce a “Tariff Rate Quota system, allowing a fair volume of imports to enter Europe free of tariffs.”
This quota of 18.3 million tons of tariff-free steel imports, EUROFER said, reflected 2013 market conditions “before the first wave of Chinese steel flooding,” and was almost as high as “the combined steel production of France, Belgium, and Luxembourg.”
“Only unsustainable imports above quota levels will be subject to a 50% tariff,” the industry group added in the ststement.
Brussels seeking concessions from Trump?
The EU tariffs follow a similar steel tariff hike by the Trump administration earlier this year.
EU Trade Commissioner Maros Sefcovic said at a press conference in Strasbourg on Tuesday that Brussels decided to move “in our European way,” which meant “keeping European markets open” and “offering quotas for our partners.”
“What was clear, coming from the US, was the question: ‘Look, we already adopted very robust measures — what are you Europeans going to do?'” he told reporters.
As some observers see the EU tariffs as a bid to convince Trump to reduce his 50% duties on European steel imports, EUROFER left little doubt it hopes for US concessions.
“We are hopeful that these new provisions will lay the ground for a renewed dialogue with the Trump administration to lift the…tariffs and relaunch work on an alliance to ring-fence against global overcapacity,” said the group’s statement.
How to bring Trump back to the negotiating table?
Penny Naas, the acting senior vice president for innovation and competitiveness at the German Marshall Fund, argued the EU-US tariffs deal struck in August also included “cooperation on ring-fencing their domestic markets” from Chinese overcapacity that could lead to the EU gaining some “preferential access” for its products to the US market.
Speaking with DW, she noted that curbing overcapacity and ensuring proper market conditions for the steel, iron, and aluminum industry had been an “unsuccessful feature of US-EU negotiations for decades.”
“The EU’s moves suggest that the US and EU are becoming more aligned on tackling this issue in a coordinated fashion,” she added.
And Alberto Rizzi, policy fellow at the European Council on Foreign Relations, thinks the EU’s steel tariff is also an “indirect message” to Washington that Brussels, too, can impose higher tariffs.
“It is unlikely that the US will drop tariffs on EU’s steel imports but it might encourage Washington to offer a quota arrangement to the EU under which a certain percentage of the EU’s steel exports to the US could enter tariff free,” he told DW.
But such a policy could damage the EU’s relations with other steel producers, Rizzi added.
Collateral damage for UK and India?
In the United Kingdom, meanwhile, fears are mounting that the EU steel tariffs will become an “existential threat” to the UK steel industry, said Alasdair McDiarmid, the assistant general secretary of the Community Trade Union, the dedicated labor union for British steelworkers.
As about 80% of UK steel exports go to the EU, making the bloc the largest market for British steel, “losing access to this market would have a catastrophic impact on British jobs,” McDiarmid said in a statement.
After UK Prime Minister Keir Starmer annouced this week that he was in talks with Washington and Brussels, Naas thinks there is a possibility of the UK being included in efforts to ring-fence against Chinese exports.
Another major steel producing country bound to suffer from the new EU tariffs is India. About 3.3 million tons, or 60% of India’s total steel exports, headed toward the bloc in 2024, according to Sandeep Poundrik, secretary for the Indian Ministry of Steel.
The EU is currently negotiating a free trade agreement, with an Indian delegation expected in Brussels even this week. Taxing Indian steel imports under the EU’s sweeping carbon emissions regulations for imports is already a major point of contention.
Edited by: Uwe Hessler
Source link
