The European Commission has taken decisions taking into account overcapacity, declining demand and volatility in global trade. These decisions will be in force until June 30, 2026. The new regulations aim to control import flows, protect European steel producers and ensure fair competition.
EU's New Strategy on Steel
The European Union aims to ensure a more balanced distribution of imports by revising the tariff quota (TRQ) system that entered into force in 2019. Launched on December 17, 2024, the operational review found that import pressure has increased and some countries are turning to the EU market. In particular, it was emphasized that China's aggressive export policies put great pressure on EU producers. In addition, the capacity increase in India and ASEAN countries and the alternative suppliers directed to the EU market by Russia-Belarus sanctions were also evaluated.
USA's Section 232 Decision and its Reflections on the EU
The USA strengthened Section 232 steel import measures on February 10, 2025, removing exemptions previously granted to certain countries. This change caused a significant shift in global steel trade. While many countries turned to the EU to compensate for their losses in the US market, the Commission noted that this would put additional import pressure on the European steel market. This development led the EU to take stricter measures in TRQ management.
What Do the New Regulations Include?
Tariff Quota (TRQ) Management Reshaped: Quota allocations and management have undergone major changes. First, quota management in certain product groups was tightened and new rules were introduced to protect traditional trade flows.
Special Quota Restrictions Imposed on Countries: Access to duty-free quotas on certain steel products was restricted for major exporters such as China, India and Egypt. Noting that China continues to enter the EU at low prices for some products subject to anti-dumping measures, additional restrictions were introduced to prevent this.
Liberalization Rate Minimized: The duty-free import quota, which was previously increased by 1% annually, will only be increased by 0.1% from 2025. This decision aims to reduce the pressure of imports on the domestic market.
New Quota Limits for Exporters: The maximum volume that a single country can now export under a quota has been limited. Limits ranging from 10% to 30% will be imposed on certain steel product groups to offset the price pressure on European producers from large volumes of shipments, especially from China and ASEAN countries.
Quarter Rollover Mechanism Updated: The transfer of unused quotas to the next quarter has been restricted for certain categories that experience excessive utilization. The aim is to ensure fair quota utilization among importers.
Redistribution of Unused Quotas Due to Russia and Belarus Sanctions: Some of the import quotas previously allocated to Belarus and Russia were redirected to other suppliers to ensure security of supply within the EU. However, assessing the impact of import increases in 2024, the Commission canceled some of this redistribution in certain product groups and reduced the quota again.
Country limits on quotas are now determined: In some product categories, certain countries were found to be taking large shares, exceeding traditional trade flows. To prevent this, the maximum volume that can be exported under residual TRQs has been limited.
What Does the Industry Say?
European steel producers argue that the new regulations will balance import pressure and protect the industry. The European Steel Association (EUROFER) stated that the tightening of measures was inevitable due to current market conditions. On the other hand, importing countries and trading partners say the tightened quotas will negatively affect competition and supply chains. Major steel producers such as China and India argue that the EU's trade policies could create imbalances in global trade.
What to Expect Ahead?
The European Commission will continue to closely monitor developments in the steel sector. Throughout 2025, additional measures may be considered, taking into account import flows, domestic market balances and global trade policies. In particular, the continued interest of China and India in the EU market may lead the EU to take additional safeguard measures. In the coming period, negotiations between importing and exporting countries will be critical.
Comments
No comment yet.