The European Commission yesterday imposed provisional safeguard measures concerning imports of a number of steel products. These safeguard measures, effective from today, will address the diversion of steel from other countries to the EU market as a result of the recently imposed US tariffs. The traditional imports of steel products will not be affected. The European Aluminium (EA) association calls on the Commission to monitor import surges vigilantly and defend its industry against an influx of aluminium imports if proven necessary.
EU Commissioner for Trade, Cecilia Malmström, commented: “The US tariffs on steel products are causing trade diversion, which may result in serious harm to EU steelmakers and workers in this industry. We are left with no other choice than to introduce provisional safeguard measures to protect our domestic industry against a surge of imports. These measures nevertheless ensure that the EU market remains open, and will maintain traditional trade flows. I am convinced that they strike the right balance between the interest of EU producers and users of steel, like the automotive industry and the construction sector, who rely on imports. We will continue to monitor steel imports in order to take a final decision by early next year, at the latest.”
The provisional measures concern 23 steel product categories and will take the form of a Tariff Rate Quota (TRQ). For each of the 23 categories, tariffs of 25% will only be imposed once imports exceed the average of imports over the last three years. The quota is allocated on a first come first serve basis, thus at this stage not allocated by individual exporting country. These measures are imposed against all countries, with the exception of some developing countries with limited exports to the EU. Given the close economic links between the EU and the European Economic Area (EEA) countries (Norway, Iceland, and Liechtenstein), they have also been exempted from the measures. These exclusions are compatible with both the EU’s bilateral and multilateral Word Trade Organisation (WTO) obligations.
European Aluminium calls on the Commission to monitor aluminium import surges
After yesterday’s decision of the EU Commission to impose safeguard measures on certain steel products, the European Aluminium (EA) association calls on the Commission to monitor import surges vigilantly and defend its industry against an influx of aluminium imports if proven necessary.
“The steel safeguard measures send a strong signal: the Commission is willing to take decisive action to preserve European industries against distortive and unfair trade practices. We trust the Commission to have the courage to implement commensurate safeguard measures to offset any negative impact if the surveillance data that is being collected since mid-May shows a threat of injury to the aluminium industry,” commented Gerd Götz, EA’s director general.
The European aluminium industry faces the risk of being harmed by a redirection of aluminium from third countries that are targeted by the US measures under Section 232. This redirection could see an additional 35% of semi-fabricated aluminium products entering Europe, which could create unfair competition for European producers who are already under immense pressure due to growing Chinese overcapacity in both primary and semi-fabricated aluminium.
The industry association has been very vocal about the need to address Chinese overcapacity, which is the root cause of global market imbalances. The total Chinese overcapacity is currently around 10 million tonnes, which is almost five times the total EU production of primary aluminium. During the first quarter of this year, Chinese imports to the EU of flat-rolled products increased by 37% compared to the same period last year. Similarly, there was an increase of 22% for extruded products imports during the first quarter. Depending on the product, Chinese import shares in extruded products vary from 31 to 75% of all imports into EU. While the global problem of Chinese overcapacity should be addressed at G20 level through the creation of a Global Multilateral and Governmental Forum on Aluminium Overcapacity, safeguard measures might be necessary to rebalance the EU market in the short-term.
“We are expecting an increasing demand for our metal in several strategic application areas including low carbon mobility, resource-efficient packaging and energy efficient buildings but European producers are not able to fully benefit from this positive trend due to Chinese overcapacities. If we do not defend ourselves against unfair competition, Europe risks losing a strategic industry vital to its transition to a low carbon economy. Our strongly interlinked value chains could start to disintegrate, and research and innovation may take place elsewhere. Business is promising for our industry and its customers so Europe must be prepared to act with adequate trade defence measures as soon as necessary,” concluded Götz.