EU lawmakers approve tighter steel import curbs to counter global overcapacity

The European Parliament approved May 19 the new steel safeguard measures that will slash tariff-free import volumes by nearly half and double customs duties on excess shipments, as the bloc moves to shield its domestic industry from a global steel surplus ahead of the expiration of current protections in June.

The new regulation, which had already been agreed between the parliament and council negotiators, was approved by 606 votes in favor, 16 against and 39 abstentions.

It limits annual tariff-free steel imports to 18.3 million metric tons, down 47% from 2024 quota levels. The measures aim to counter trade distortions caused by global steel overproduction while maintaining compatibility with World Trade Organization rules, according to a statement from the council. The new regulation has now to be formally approved by the council and will be effective July 1.

Tougher trade barriers

Under the new framework, imports exceeding the quota will face a 50% customs duty, double the current rate of 25%. The higher tariff will also apply to steel products not covered under the quota system.

The regulation replaces safeguard measures that have been in place since 2018 and are set to expire June 30.

The European Parliament said the steel industry is strategically important to the EU's defense capabilities, justifying strengthened trade protections.

The measures introduce a "melt and pour" rule to determine steel origin based on where the material is first melted and cast, rather than where it undergoes final processing. This traceability requirement aims to prevent circumvention through minimal processing in third countries before shipment to Europe. The commission will have to take into account the origin of steel when assigning annual quotas.

The regulation includes provisions for Ukraine, which the parliament said should receive special consideration as a candidate country facing security concerns. Lead negotiator Karin Karlsbro said Ukraine should not be penalized by EU measures while its steel industry faces direct Russian attacks. At the same time, the exemption for Russian steel slabs has not been extended.

"Europe needs a strong and competitive steel industry built on trade, innovation and fair competition. Combatting the negative trade effects of global overcapacity is essential, and I welcome the exemption for Russian steel slabs not being extended," Karin Karlsbro (Renew, SE), lead negotiator of the file, said.

"At the same time, Ukraine must not be punished by EU measures while its steel industry is under direct Russian attack. Ukraine is not the source of global overcapacity. We must treat them as a future EU member and strategic partner, and the EU must now live up to our promise that Ukraine will receive special status under the new regulation," Karlsbro said.

Europe's steel industry welcomed the approval of the new EU steel trade measure by the European Parliament, calling it an important step toward addressing the growing pressures facing the sector from record imports, global overcapacity and rising international protectionism.

"At a time of growing geopolitical uncertainty and market distortions, this sends an important signal that the EU is prepared to act to defend its industrial base, security and autonomy. There must now be no delay in ensuring the measure enters into force by 1 July 2026, when the current safeguard expires," Director General of the European Steel Association (EUROFER) Axel Eggert said.

EUROFER said further action remains necessary to support the sector, particularly through tackling high energy prices, delivering an effective Carbon Border Adjustment Mechanism (CBAM) and addressing global steel overcapacity.

Platts, part of S&P Global Energy, assessed domestic HRC in Northern Europe at Eur690/mt EXW Ruhr and in Southern Europe at Eur680/mt EXW Italy on May 18, both down Eur5/mt day over day.

Import activity persisted, but participants remained cautious. Platts assessed imported HRC in Northern Europe at Eur580/mt CIF Antwerp and in Southern Europe at Eur575/mt CIF on May 18, both unchanged day over day.