The European Commission proposed doubling tariffs on excess steel imports to 50 percent Tuesday. The plan also halves import quotas to protect the bloc’s steelmakers from global overcapacity.
The move comes as the EU steel industry grapples with surging imports and job cuts. Officials say the changes will replace temporary safeguards set to end next year. They aim to match U.S. and Canadian duties while curbing trade diversion from China.
How Quota Cuts Target Chinese Overproduction
The proposal slashes annual steel import quotas by nearly 50 percent to 18.35 million metric tons. This total covers key products like hot-rolled coil and plates, with reductions of 17 to 38 percent per category. Tariffs would apply at 50 percent on volumes above these limits, up from 25 percent now.
Commission Executive Vice President for Industry Stephane Sejourne called the measures essential. “First, we will reduce foreign steel quotas by almost half,” he told steel groups last week. The rules use “melt-and-pour” criteria to trace steel origins and block rerouting through third countries.
Global overcapacity drives the crisis. The OECD projects excess supply at 721 million metric tons by 2027, much from subsidized Chinese output. Chinese exports hit record highs this year after U.S. barriers rose under President Trump.
EU steel output fell amid the pressure. The sector shed 18,000 jobs in 2024 alone, with 12 million tons of capacity idled. EUROFER President Henrik Adam welcomed the plan. “The commissioner seems to have understood what the sector needs,” he said.
Timeline Traces Safeguards Back to 2018 Surge
The EU first imposed steel safeguards in 2018 after U.S. tariffs sparked import floods. Current quotas allow tariff-free entry up to limits, with 25 percent duties beyond.
Adjustments came in March 2025, when the Commission cut liberalized volumes from 1 percent to 0.1 percent of consumption. A July consultation gathered input on replacements. Tuesday’s proposal builds on that, with most changes effective after June 30, 2026.
The system faces five-year reviews starting in 2031. An initial scope check could occur within two years.
UK Makers Brace for Post-Brexit Blow
British steel faces the sharpest hit outside the EU. About 70 percent of UK output heads to the bloc. The 50 percent tariff on excess would raise costs more than U.S. levies, UK Steel warned.
Gareth Stace, UK Steel chief, called it a “devastating” shift. Post-Brexit trade deals offered no buffer, he said. Exporters may seek U.S. relief through ongoing talks.
China decried similar moves in September as protectionism. (Unverified: No public response from Beijing’s commerce ministry to the October 7 details; evidence missing includes official statement post-proposal.)
Downstream users like automakers worry about higher prices. The plan supports 300,000 direct jobs but could add 10 to 20 percent to input costs, analysts say.
The proposal advances EU strategic autonomy in trade. It aligns with a July U.S.-EU pact for a “metals alliance” against overcapacity. Yet critics fear retaliation and supply chain strains.
Member states and the European Parliament must approve the plan. Negotiations start soon, with adoption eyed before mid-2026. WTO compliance reviews could follow by 2027.
