EU moves to halve steel imports, doubles tariffs to shield domestic industry

The European Union has struck a preliminary agreement to sharply curb steel imports by nearly half and double tariffs on excess shipments, in a sweeping move aimed at protecting its struggling domestic industry from global overcapacity and rising trade pressures.

Under the deal reached between the European Parliament and the Council representing EU governments, tariff-free steel imports will be cut by 47 per cent to 18.3 million metric tonnes annually. Imports beyond that quota will face duties of up to 50 per cent — double the current rate — in a bid to discourage excess inflows.

The measures are designed to lift utilisation levels in Europe’s steel plants to 80 per cent from around 65 per cent currently, reflecting concerns that cheap imports have eroded competitiveness and dampened output across the bloc.

The move comes against a backdrop of escalating global trade tensions, including tariffs imposed by Donald Trump during his earlier tenure, which had already reshaped global steel flows and weighed on European producers.

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Global suppliers in focus

Major exporters to the EU — including Turkey, South Korea, Indonesia, China, India, Ukraine and Taiwan — are likely to feel the impact of the tighter regime, as Brussels seeks to contain what it views as market distortions caused by excess production capacity in several regions.

EU steel imports are currently governed by safeguard measures introduced during Trump’s first presidency, which impose a 25 per cent tariff on shipments exceeding quota limits. However, these rules are set to expire on June 30 under World Trade Organization norms, necessitating a revised framework.

The European Commission, which first proposed the new curbs in October, has argued that without extended protection, the bloc’s steel sector would face further decline. The industry has already shed about 100,000 jobs since 2008, highlighting the structural challenges confronting manufacturers.

Tighter rules, Russia phase-out

The new regime will also tighten rules of origin by focusing on where steel is “melted and poured”, a move intended to prevent circumvention of quotas through third countries. The measures will be subject to periodic review to ensure effectiveness.

In a parallel geopolitical shift, the EU also committed to phasing out steel imports from Russia by as early as September 2028. The bloc imported roughly 3.7 million tonnes of Russian steel slabs last year.

The agreement still requires formal approval from both the European Parliament and EU member states before it can come into force.

Implications for India

For India, which counts among key steel exporters to Europe, the tighter quotas and steeper tariffs could weigh on outbound shipments and margins, especially as producers grapple with volatile global demand and price pressures.

Analysts say the move may trigger a reshuffling of global trade flows, with surplus steel potentially seeking alternative markets in Asia and Africa, intensifying competition for Indian producers both at home and abroad.

With inputs from agencies.