Trade Cases

EU Imposes Safeguard Measures on Steel Imports

February 4, 2019

The European Union has initiated new safeguard measures on steel imports to replace provisional ones introduced in July 2018. The measures are designed to protect the steel industry in the EU from excessive imports diverted there as a result of the Section 232 tariffs in the United States.

An investigation into the potential increase of imports to the EU as a result of steel tariffs imposed by the U.S. under Section 232 concluded that an increased threat of injury exists to the European steel industry. The measures cover 26 product categories and consist of quotas, based on historical imports, which are subject to a duty of 25 percent when exceeded. The measures will remain in effect for three years, applied over three periods, and expire June 30, 2022. The safeguard measures will be reviewed by the Commission if trade conditions change.

The European Commission commented in its findings: “The Commission would like to stress that the 25 percent off-quota tariff fixed by the Commission at the provisional measures’ stage intends to deal with a significant increase of steel imports into the Union, which in the most recent period has speeded as a result of the global 25 percent tariff that the U.S. have imposed on steel imports (with a limited number of origin exceptions subjected to very restrictive quotas) and the 50 percent tariff on Turkish imports. The express aim intended by the U.S. with their measures is to achieve the industrial policy objective of artificially reducing the level of steel imports by 13.3 million metric tons, which will in turn enable the U.S. steel industry to operate at an 80 percent capacity utilization rate.

“It is important to highlight here again that, whereas the tariffs under the Section 232 measures are levied from the first import and therefore seriously distort import trade inflows downwards, the Union tariff-rate quota allows the continued entry of imports from all origins without additional hurdles and only produce effects if the relevant quotas representing the traditional flow of imports from every origin are exceeded, notably because of the trade diversion produced by the U.S. measures.”

The Commission said it would address, as needed, any cumulative effects caused by the safeguard measures on existing antidumping and countervailing measures. The Commission seeks to avoid the imposition of “double remedies” in such cases where quota limits are exceeded.

Developing country members of the WTO will be excluded from safeguard measures as long as their share of EU imports does not exceed 3 percent. The Commission also ensured the measures comply with obligations arising from bilateral agreements.