EU cuts Ukraine's duty-free steel quota by 59%, beyond reduction in total imports

At the stage of the new steel safeguard measure passing through joint adoption, the EU's legislative triumvirate signaled that Ukraine would receive special consideration, while its industry faces Russian attacks. However, the tariff-rate quota (TRQ) allocated to Ukraine appears to be among the most reduced relative to former exports.

The regulation replacing the old steel safeguard measures, which had been in effect since mid-2018, was adopted by the European Council on June 8 and came into force on July 1.

By lowering import quotas, the measure cuts the EU's tariff-free imports by 46% year over year and by 47% compared to 2024 to 18.3 million metric tons. Above-quota volumes now incur a 50% customs duty, up from 25% previously, according to the European Parliament.

The EU has a Deep and Comprehensive Free Trade Area with Ukraine, and in May, there were signals from the Commission and the Parliament that Ukraine should receive special consideration or status as an EU candidate and as a country facing security concerns.

"Ukraine must not be punished by EU measures while its steel industry is under direct Russian attack," Karin Karlsbro, a Parliament member, said in May. "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."

However, the TRQs for Ukrainian steel shipments for July 2026 through June 2027 total 1.05 million mt, down 58.5% from 2025 and 48.1% lower than 2024 levels. Ukraine exported 2.53 million mt to the EU last year and 2.03 million mt in 2024, according to data from S&P Global Market Intelligence's Global Trade Analytics Suite.

"The text of the regulation contains specific provisions requiring the European Commission, when distributing tariff quotas among countries, to take into account the situation of Union candidate countries facing an exceptional and immediate security situation, particularly where they previously benefited from preferential access to the EU steel market," said a spokesperson for the Council, adding that the Karlsbro's citations explicitly refer to Ukraine as an example of such a country.

The spokesperson suggested reaching out directly to the Commission, as the institution responsible for implementing the regulation and negotiating TRQ allocations.

The Commission's press service has not responded to an email from Platts, part of S&P Global Energy.

"The ratio of the quota to 2025 imports varies across countries," Stanislav Zinchenko, CEO of Kyiv-based think tank GMK Center, told Platts. "Several countries have quotas that are only 20% lower than their 2025 import volumes. Meanwhile, Ukraine and Turkey received quotas that are 60% lower than their 2025 sales volumes."

"Ukraine was adversely affected mostly because quotas were allocated based on historical deliveries – those made in 2022-2024, but that period marked the beginning of the war and severely impacted the Ukrainian steel industry and sales," said Zinchenko, adding that the very low baseline effect should have been offset by a larger Ukraine's share in the free trade agreement portion of the quota, as provided for by the regulation, but in practice, this compensation did not happen.

This EU decision will reduce steel imports from Ukraine by 1.3 million to 1.5 million mt/year, GMK estimates. "This is critical right now, especially given that Ukraine has once again lost its maritime export capabilities following the suspension of the Black Sea corridor due to Russian attacks. This already happened in 2022, and the industry survived thanks to a lifeline from the EU, which exempted Ukraine from all the duties and safeguard measures. Today, the situation is different: there is no buffer that could soften the blow," said Zinckenko.

Elsewhere, Ukraine has been untouched by new UK steel import restrictions. The UK has reduced the total volume of tariff-free steel imports even more drastically than the EU, by 60%, and similarly imposed a 50% tariff on out-of-quota volumes.

The respective trade measure has also been in force since July 1, but it does not apply to steel goods originating in Ukraine, reflecting the UK's continued support in light of Russia's ongoing invasion, the UK government said on its website. However, Ukraine's steel exports to the country remain minor, at 8,050 mt in 2025 and 19,204 mt in 2024, according to the GTAS.

Under the Biden administration, the US suspended the Section 232 steel tariff on Ukrainian steel in response to Russia's invasion. At the time, the tariff was 25%. After taking office, President Donald Trump eliminated previous Section 232 exemptions, including those for Ukraine, and in June 2025, doubled the tariff to 50%, a duty that also applies to steel from Ukraine. The US bought only 15,523 mt of it in 2025, down from 35,252 mt in 2024.