EC to cut steel import quotas, raise tariffs to 50% to protect industry

The European Commission is set to propose a legislative measure Oct. 7 aimed at reducing steel import quotas by nearly half, bringing them closer to levels seen in 2012-2013, a source close to the Commission told S&P Global Energy. Additionally, it plans to increase customs tariffs on volumes exceeding these quotas to as high as 50%, aligning with the import tariffs imposed by the US and Canada.

This proposal is intended to replace the safeguards scheduled to expire by June 2026. Under World Trade Organization rules, they cannot be extended. As a full legal text, it must receive support from the European Parliament.

The European Commission's proposal is designed to support the European steel industry and protect it from cheap steel imports, especially after the new levies from the US that are triggering a domino effect, with the US being the largest worldwide importer of steel.

In July, the EU reached a tariff agreement with the US, but some negotiations are still ongoing because President Trump did not agree to lower the existing 50% duties on European steel.

Steel plays a crucial role in the European economy, generating approximately Eur191 billion -- $225 billion -- in revenue and directly employing 303,000 highly skilled workers. The industry produces an average of 140 million metric tons of steel per year. However, with global steel overcapacity at record highs and energy and raw material prices remaining uncompetitive, the European steel sector is facing a crisis.

According to European Steel Association, or Eurofer data, the European Steel Association announced 18,000 layoffs last year, alongside a record 12 million mt of capacity closures. This adds to the cumulative losses of 100,000 jobs and 26 million mt of capacity closures from 2008-2023.

On Oct. 1, the European trade union federation, IndustriAll Europe, and Eurofer convened an emergency steel social summit to demand urgent action to address the impact of global steel overcapacity on the EU steel market, calling for robust and effective trade measures.

"Steel is the backbone of Europe's economy, yet the sector is now at breaking point," said Judith Kirton-Darling, General Secretary of industriAll Europe. "That is why trade unionists from every corner of Europe have joined steelmakers at this summit to call for urgent action."

"The European Union needs to act now, and decisively, before all lights go out in large parts of the EU steel industry and its value chains," Henrik Adam, President of Eurofer, said. "Now more than ever, we need strong new EU steel trade measures, competitive energy prices, and EU content provisions to ensure the viability and transition of European steel."

According to Eurofer's latest outlook, the Steel Weighted Industrial Production index is expected to face another downturn in 2025, projected to decline by 0.7%, a revision from the previously anticipated decrease of 0.5%.

Platts, part of S&P Global Energy, assessed domestic HRC in Northern Europe Sept. 30 at Eur570/mt ex-works Ruhr, up Eur5 on the day, and imported HRC at Eur490/mt CIF Antwerp, up by Eur5 on the day.