The European Commission has proposed cutting tariff-free steel import quotas by almost half and imposing a 50% duty on shipments above those limits, in a package aimed at stabilising EU steelmaking capacity and addressing global oversupply.
Under the plan unveiled on 7 October, the annual tariff-free quota would be set at 18.3 million metric tonnes, a level the Commission says corresponds to imports in 2013, when structural overcapacity began to build. The out-of-quota duty would double from 25% to 50%, aligning the EU with Canada and the United States, although U.S. tariffs apply from the first tonne. The measures require approval by EU governments and the European Parliament.
The Commission argues that rising imports, combined with U.S. tariffs redirecting trade flows, have left EU steelmakers operating at about 67% of capacity. The objective is to lift utilisation towards 80%, a level viewed by the industry as commercially sustainable. Existing EU “safeguard” measures—quota caps across 26 product categories—have rolled over annually but must expire by mid-2026 under World Trade Organization rules unless replaced or reconfigured.
According to the proposal, the reduced quota could pare imports to roughly a 15% market share. Importers would also have to provide enhanced proof of origin to counter circumvention. The European Economic Area countries—Iceland, Liechtenstein and Norway—would be exempt from the new regime. The Commission indicated it would open talks with WTO partners on how the new limits would be administered, including potential tariff-free allocations.
Industry reaction
EU producers’ association Eurofer welcomed the move. Director-General Axel Eggert said the measures were the step the sector had sought and could help safeguard employment across the supply chain. European mills have repeatedly warned of the effects of subdued demand, high energy costs during the past two years, and competition from lower-priced imports.
The Commission’s announcement follows signalling in late September and early October that Brussels was preparing tougher defences for the sector, including the option of higher duties on selected Chinese steel and related products.
UK concerns
The United Kingdom, the eighth-largest steel exporter to the EU, sought urgent clarification from Brussels. UK Steel said the proposed regime would have a severe impact on British producers, which send the majority of their exports to EU customers. Industry voices warned of disruption to established supply chains and urged engagement to preserve trade flows while addressing overcapacity.
Trade channels and major suppliers
In 2024, the principal steel suppliers to the EU included Turkey, India, South Korea, Vietnam, China, Taiwan and Ukraine. The Commission’s plan would not target specific countries but would apply across origins, with exemptions for the EEA. The approach mirrors the EU’s recent use of product-wide safeguards to manage surges while remaining within WTO parameters.
Link to U.S.–EU talks
Brussels sees the new structure as compatible with efforts to reach an understanding with Washington on steel trade measures. The Commission indicated the revised system could facilitate a shift in the United States from flat 50% tariffs to a quota-based arrangement under a bilateral framework outlined in late July. Further coordination among “like-minded partners” is envisaged to address global capacity imbalances, notably in relation to China.
Next steps and timeline
The proposal now moves to the Council and the Parliament. If adopted, the framework would take effect ahead of the mid-2026 expiry of current safeguards, providing continuity while tightening thresholds. The Commission also plans consultations with WTO partners on administration and verification, including enhanced origin checks intended to reduce trans-shipment.
Market context
EU apparent steel demand has softened compared with pre-pandemic levels, while imports have grown as producers in Asia and elsewhere channel output towards Europe. Previous EU adjustments this year trimmed quotas and restricted transfers of unused country allocations in high-pressure categories; the latest package goes further by reducing aggregate tariff-free volumes and raising the out-of-quota duty to a deterrent level.
Outlook
The combination of lower quotas and a higher out-of-quota tariff is intended to lift EU capacity utilisation and underpin investment plans, including projects tied to lower-carbon production routes. Stakeholders in downstream sectors will assess potential effects on input costs and availability. The UK dimension remains a live issue, with London seeking arrangements that preserve established trade while aligning with broader efforts to curb global excess capacity.
EU set to impose 25–50% tariffs on Chinese steel, report says
