The European Commission issued a regulation imposing definitive safeguard measures on imports of steel products. The measures are to take effect from 2 February, and replace the provisional ones in place since July 2018.
The Commission launched an investigation in March 2018 as part of the EU’s response to the decision by the US to impose tariffs on steel products. This investigation showed that imports of steel products into the EU have been increasing sharply.
This is seriously threatening EU steelmakers, who are still in a fragile position due to persistent overcapacity in the global steel market and an unparalleled number of unfair trade practices by certain trading partners. The restrictions on the US market caused by the Section 232 tariffs on steel are causing a diversion of trade flows into the EU.
…an official statement by the Commission reads.
These measures are fully aligned with the EU’s WTO commitments and have been carefully shaped to preserve a continued flow of imports that guarantees effective competition in the European steel market and sufficient choice for the numerous EU users of steel, the Commission explained.
The measures concern 26 steel product categories and consist of tariff-rate quotas above which a duty of 25% will apply.
The tariff rate quotas fully preserve the traditional levels of imports into the EU and will be increased progressively.
This system is similar to the provisional measures currently in place, with some important modifications that minimise trade disruptions and preserve traditional trade arrangements in terms of quantities and origins. For example, the main supplying countries will benefit from individual quotas based on their own historical imports.
These measures should remain in place for a period up to three years, but can be reviewed in case of changed circumstances.
The safeguard measures, imposed in their provision form in July 2018, are part of the three-pronged response outlined by the European Commission in 2018. As a result of the import duties applied by the US as of 23 March 2018 under Section 232 the US Trade Expansion Act of 1962, exporting steel to the United States has become less attractive. There are already indications that, as a consequence, steel suppliers have diverted some of their exports from the US to the EU.
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