EU's Strategic Steel Shield: A New Era Amid Global Trade Tensions

The European Commission is set to significantly reduce steel import quotas by nearly half, imposing a 50% tariff on volumes exceeding those limits. This move mirrors measures taken by the U.S. and Canada, according to a source familiar with the plans, and forms a key component of a forthcoming policy set to be presented on October 7. Stephane Sejourne, the Commission's executive vice president for industrial strategy, has already briefed steel associations about these developments.

Current EU steel safeguards will lapse on June 30 next year, prompting the introduction of new strategies to address overcapacities experienced due to subsidized Chinese steel production. In an earlier move from April 1, the EU had tightened current steel import quotas by 15%, and it's now evaluating potential market modifications, including aluminium safeguards and export duties on scrap metals.

The global spotlight on steel increased after the U.S. raised tariffs to 50% on steel and aluminium imports, leading to a landmark trade agreement between the EU and the U.S. in July. This 'metals alliance' aims to protect both regions from China's overwhelming production capabilities. EU trade commissioner Maros Sefcovic's recent discussions with U.S. Trade Representative Jamieson Greer emphasize the continuing negotiations to solidify protective measures.

(With inputs from agencies.)