Trade Cases

European Commission Institutes Safeguard Measures on Steel Imports

Written by Sandy Williams

The European Commission has announced it will impose provisional steel quotas to prevent steel imports from being diverted from the U.S. to Europe.

The safeguard measures will go into effect July 19 and will remain in place for a maximum of 200 days.  The provisional measures will affect 23 steel product categories and take the form of a Tariff Rate Quota. A 25 percent tariff will be placed only after imports exceed the three-year average and will be allocated on a first-come first-served basis. The measures will cover all countries except those with limited imports to the EU and the European Economic Area countries of Norway, Iceland and Liechtenstein.

Commissioner for Trade Cecilia Malmström said: “The U.S. tariffs on steel products are causing trade diversion, which may result in serious harm to EU steelmakers and workers in this industry. We are left with no other choice than to introduce provisional safeguard measures to protect our domestic industry against a surge of imports. These measures nevertheless ensure that the EU market remains open and will maintain traditional trade flows. I am convinced that they strike the right balance between the interest of EU producers and users of steel, like the automotive industry and the construction sector, who rely on imports. We will continue to monitor steel imports in order to take a final decision by early next year, at the latest.”

Comments will be taken into consideration toward a determination of final definitive measures. The European Commission hopes to conclude that investigation by early 2019.

Twelve steel product categories covered by the provisional safeguard measures are currently subject to anti-dumping and countervailing duties (e.g., China, Russia, Ukraine). In order to avoid the imposition of “double remedies,” whenever the tariff quota is exceeded, the Commission will consider the suspension or the reduction of the level of these duties to ensure that the combined effect of these measures does not exceed the highest level of the safeguard or anti-dumping/anti-subsidy duties in place.

The safeguards are part of a three-pronged response to U.S. tariffs on steel an aluminum that include “rebalancing measures” imposed on June 20 and legal action filed with the World Trade Organization on June 1.

The measure was welcomed by the European Steel Association (Eurofer) and the European Steel Tube Association, but was condemned by European automakers who fear the tariffs will push elevated steel prices even higher.

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