【Ferro-alloys.com】: The European Commission proposed on Tuesday a 50% tariff on steel above a lowered annual import limit, in a bid to reinvigorate the bloc’s ailing metals sector and ward off similar US duties on EU steel exports.

The announcement, which must still be approved by EU countries and the European Parliament, would also see Brussels cut its annual import quota by 47%, to 18.3 million tonnes. The current quota stands at 33 million tonnes, with imports above that threshold currently facing a 25% duty.

The measures aim to shield Europe’s strategically crucial steel industry from increasingly fierce global competition. The alloy is used in a wide range of civilian and military structures and products, including infrastructure, transportation, and advanced manufacturing.

“A strong, decarbonised steel sector is vital for the EU’s competitiveness, economic security, and strategic autonomy,” Ursula von der Leyen said in a statement.

In a thinly veiled reference to China, which is the world’s top steel producer and exporter, the Commission president added that “global overcapacity is damaging our industry.”

Europe’s steel industry has struggled for years with high energy prices and low-cost exports from China and India. The bloc’s share in global production has dropped from 9% to 7% since 2014.

Steel manufacturers have also shed 100,000 jobs over the past 15 years, according to trade association Eurofer. The industry also directly employs 300,000 people and indirectly support more than 2 million jobs across the EU.

“We are the only region in the world where [steel] production is actually decreasing,” EU trade chief Maroš Šef?ovi? recently told Euractiv.

These problems have been exacerbated by Donald Trump’s imposition of a blanket 50% tariff on US steel imports earlier this year. America is the biggest purchaser of EU steel and iron articles, importing €8 billion worth of the items in 2024.

Trump’s tariffs also sparked alarm among European steel producers, with Eurofer warning that the duties could lead the bloc to be “flooded by cheap foreign steel” by causing previously US-bound exports to be redirected toward Europe.

One senior EU official said the new proposed tariff and quota system will provide a “very good basis” for Brussels to “engage” with Washington over the terms of the EU-US trade deal clinched last July.

The deal leaves most EU exports to the US facing a 15% levy, although steel and aluminium remain subject to a higher 50% duty.

“We have this opening to be able to have a negotiation so that we move away from the current 50% tariffs that affect our steel exports to the US,” the official said. “We take the view that this proposal is actually an important stepping stone to be able to move to a negotiating process with the US on this.”

Tuesday’s efforts also come amid persistent efforts by Brussels to forge an alliance with Washington to combat Chinese “overcapacities”. Chinese steel exports are set to reach a record high of up to 120 million tonnes this year, according to analysts polled last month by Reuters.

“Regardless of what the Chinese authorities have been saying, we don’t see that this problem of overcapacities is going away,” the senior official said.

“On the contrary, we see that it is worsening,” they added, noting that Beijing is “the main [actor] responsible for this situation”.

‘A protectionist step’
Tuesday’s measures were quickly denounced by the China Chamber of Commerce to the EU (CCCEU).

“While the measure is presented as a defensive safeguard, it in fact constitutes a protectionist step that may generate significant negative spillover effects across downstream industries — particularly the automotive, machinery, and construction sectors,” said the CCCEU, which represents more than a thousand Chinese companies operating across the bloc.

Asked by Euractiv about the CCCEU’s criticism, EU Commissioner for Industry Stéphane Séjourné said the Commission is not “well known” for being “protectionist”.

“It is rather the outside that is closing, and we must follow in a number of markets… to protect our own sovereignty and our own jobs,” he said.

Šef?ovi? similarly noted that the “global overcapacity crisis” meant that Brussels had “no other solution” than to impose the new tariffs and import quota.

“I want to reassure everyone, we are not taking this decision lightly,” he said. “We for free and fair trade… But if our economy is affected by the global overcapacity, which is very often funded by illegal subsidies or not transparent trade flows, then we have to act.”

Eurofer, meanwhile, hailed the Commission’s proposal as a “major leap forward to defend” Europe’s steel industry. “This trade measure is vital to preserve not just the sector and its workforce, but the very backbone of EU industrial independence and green transition”, Eurofer director general Axel Eggert said in a statement.

If approved, the new measures would take effect after the bloc’s current steel sector safeguards expire in June 2026.

• [Editor:Alakay]