CRU: EC to toughen steel safeguards

Brussels says the measures will protect the EU’s steel sector from the unfair effects of global overcapacity and are vital to ensuring the long-term viability of a strategically important industry. The key proposals include: 

• Limiting tariff-free steel imports to 18.3 million tons per year, a reduction of 47% from 2024 levels; 

• Doubling the out-of-quota duty to 50%; and 

• Strengthening traceability in steel markets by introducing a melt-and-pour requirement to prevent circumvention. 

The measures will replace the existing steel safeguard, which is due to expire in June 2026, provided the European Parliament and the Council of Ministers approve them. 

European Economic Area (EEA) members—Norway, Iceland, and Liechtenstein—will be exempt. Potential EU member Ukraine will also receive favorable treatment when quota allocations are set, the EC said. 

In a prepared statement, Trade Commissioner Maroš Šefčovič said the EU’s steel trade balance has shifted over the past decade from an 11 million-ton surplus to a 10 million-ton deficit, with 65 million tons of production lost since 2007. Current output is 126 million tons; capacity utilization is 67%; and 30,000 jobs have been lost since 2018. 

“Unlike others, the EU continues to be open and will transparently engage with partners under GATT Article XXVIII, offering compensation,” he added, referring to a World Trade Organization principle. 

Industry groups, unions, member countries, and European Parliament members have long called for stronger protection for the bloc’s steel industry, especially after the Trump administration raised U.S. steel import tariffs to 50% earlier this year. 

Welcoming the EC’s measures, Axel Eggert, director general of Eurofer, said: “The ultimate goal of reducing unfair imports flooding the EU market is to allow our steel plants to operate again at a run rate of 80–85%. 

“Currently, our facilities run at unsustainable utilization levels of around 65%, causing closures and layoffs, with the latest job cuts just announced in Finland, while one-third of European steel demand is supplied by below-cost, high-carbon-intensity imports. The measure also provides some of the visibility companies need to pursue their decarbonization investments.” 

Geert Van Poelvoorde, CEO of ArcelorMittal Europe, said that, along with the expected revision of the Carbon Border Adjustment Mechanism (CBAM) by year-end, the measures “will help stem the shrinking of the steel industry in Europe.” 

But UK Steel, the trade group representing the United Kingdom’s non-EU steel industry, warned that cutting the tariff-free quota nearly in half would spell disaster for British steel, as more than three-quarters of its exports go to the 27-member EU. Director General Gareth Stace said there is also the danger of “millions of tons of steel” being redirected toward the UK from a better-protected EU. 

British Prime Minister Keir Starmer said he is in discussions with the EU and that his government is strongly supportive of the steel industry. 

Across the globe, South Korea expects its steel sector to be significantly affected because the EU is its second-largest steel export market. 

“However, since the EU has explicitly stated that it will consider free-trade-agreement signatories when allotting supplies by country, South Korea plans to secure our interests as much as possible through bilateral consultations,” the industry ministry said. 

Tougher Trade Policy but Potential for Dilution 

This is not yet an implementation—legislation will need to be passed to reach that step. The proposal will move to negotiation and discussion between the European Council and European Parliament, and legislation will ultimately follow. The proposal could be modified during that process. The timeline remains uncertain. The existing safeguard remains in effect until June 30, 2026, and some of the language in this proposal indicates that the new system is expected to start July 1, 2026. However, Eurofer has previously lobbied for an earlier start of Jan. 1, 2026, and has already publicly renewed that call in its initial response. There is clearly risk in deciding to import now; however, if buyers believe implementation is unlikely before July, there is a window to buy non-EU steel now, and domestic order books and prices may not see a significant immediate boost. 

It is also notable that there has been a concerned public reaction to this proposal from the European demand side, particularly from ACEA, the automotive manufacturers’ association. 

Other Notes: 

• Semi-finished products are not included, as in the existing safeguard. 

• The new requirement to declare where imported steel was melted and poured is informational for now, but it opens the possibility of tighter regulation later. 

• The Commission has identified 2013 as a desired reference point and proposes returning import share of demand to that year’s level. However, CRU’s Steel Cost Review shows European mill margins were very poor in 2013—0% EBITDA for the year. A lower import share does not automatically lead to a more profitable domestic steel industry. 

• Negotiations with import-origin countries are invited. There is also discussion of moving toward trade-club-like arrangements, especially with the United States, potentially establishing common external tariffs. Much of this feels closely aligned with U.S. trade policy—or at least its style.