Brussels – Lower quotas without tariffs, higher tariffs for excess quantities, and certification of origin requirements for smelting and casting: the European Commission is putting its hand to the steel market with new measures to combat global overcapacity. Following the plan for the sector, the EU executive unveils its operational strategy to meet the needs of the steel industry.
The main changes the European Commission wants to introduce are, first of all, the limitation of zero-duty import volumes to 18.3 million tonnes per year instead of 30.5 million tonnes. This is a 47 per cent reduction compared to the decreed steel volumes of 2024. The EU, therefore, practically halves the amount of steel without tariffs. Once the quota of 18.3 million tonnes is reached, tariffs of 50 per cent will be triggered on surplus steel entering the single market. These duties are double the current 25% regime. The 50% out-of-quota tariff is seen as useful to limit and thus reduce imports. Brussels admits that a lower tariff “would have risked being ineffective.”
This quota system does not currently include a country system. The European Commission does not envisage setting specific ceilings for the different steel ‘made in’ products. Still, it reserves the right to do so at a later date, if necessary, after conducting the appropriate checks and bilateral comparisons. Another measure seen as crucial to avoid loopholes and circumvent EU tariffs is the obligation for importers to indicate where the steel was melted and cast.
Eurofer calls for public support in favor of steel industry transition
The proceeds from the European steel tariffs will end up in the European Commission’s coffers, to feed those resources within the EU budget that Brussels has at its disposal without having to ask the member states for them. “There is no intention to use the proceeds as a subsidy to the sector,” clarify insiders.
Measures to counteract overcapacity
The decisions taken by the European Commission are not coincidental. They are based on 2013, a year considered a reference point because it is when the problem of global overcapacity began to manifest itself in an obvious way, especially for the twelve-star club. The EU steel industry is currently faced with a supply of more than five times the EU’s annual steel consumption (currently 620 million tonnes and set to reach 721 million tonnes by 2027). Brussels denounces “a strong pressure due to unsustainable levels” of global overcapacity,
with China at the root of a problem that has been dragging on for years.
Useful actions for negotiations with the United States
“This proposal is the first step for our industry to regain competitiveness,” emphasises the Commission’s executive vice-president responsible for industrial strategy, Stephane Séjourné. It is therefore an autonomous initiative, yet linked to the trade negotiations with the United States. The agreement on tariffs reached at the end of July does not currently include the steel sector. The parties intend to negotiate new steel trade conditions separately, and it is no secret that these new European measures, designed to take effect by June 2026 at the latest, are seen as a starting point for these negotiations with the White House.
Executive Vice President Stéphane Séjourné, responsible for Industry Strategy, presents the steel plan in Germany [photo: Pau Barrena/imagoeconomica]
The steel negotiation, however, promises to be less predictable than expected, as US President Donald Trump not only wants to counter the entry of steel but also any product containing it, such as fixtures, fittings, and even motorbikes. However, Europe’s new quota and duty regime is primarily intended as a response to China. This is said between the lines by Maros Sefcovic, the Trade Commissioner, who continues to negotiate with the United States: “EU trade is based on fair and rules-based competition, and this measure will help our steel industry to compete fairly in a context of growing global overcapacity.
In the corridors, however, things are told as they are. “We have been talking to China for a long time, and despite what the Chinese authorities say, the situation has not improved but rather worsened,” acknowledges a European official, the same one who admits that, yes, “China is not one of the main culprits” of too much steel invading the market and putting it in crisis.
The sector rejoices, ready to do even more in Parliament
Eurofer, the association of European steel producers (which includes the Italian companies Acciaieria Arvedi, Acciaierie d’Italia, Metinvest, Officine Tecnosider, and Riva), expressed appreciation for the measures. According to Axel Eggert, the organisation’s director general, “this is a major leap forward to defend the sector and constitutes clear evidence that the Strategic Dialogue on Steel, initiated by President von der Leyen, is starting to bear fruit”.
For Eurofer, this trade measure is “is vital to preserve not just the sector and its workforce, but the very backbone of EU industrial independence and green transition”. Eggert and the sector he represents hope that the new provisions “will lay the ground for a renewed dialogue with the Trump administration to lift the current 50% tariffs on EU steel imports and relaunch work on an alliance to ringfence against global overcapacity”.
The Commission’s proposal “is a good first step, but it must be seen as the first in a real change of pace,” comments Brando Benifei (PD/S&D), coordinator for International Trade for the Socialists in the European Parliament. “That is why the European Parliament will soon begin its work to strengthen its content,” he promises. “We need more effective European trade defence instruments” to “ensure fair conditions for our producers and workers, because the European industrial transition cannot take place at the expense of employment and competitiveness.”
English version by the Translation Service of Withub
