EU: Steel manufacturers need to account for extra duty until 2024
Steel producers worldwide and EU steel importers need to count for EU safeguard measures to be applied until at least 2024
Safeguards are intended for situations in which an EU industry is affected by an unforeseen, sharp and sudden increase in imports.
The objective is to give the industry temporary breathing space to make necessary adjustments – safeguards always come with an obligation to restructure.
The EU safeguard measure currently in place on imports of certain steel products will continue at least until 2024.
The initial safeguard measure was introduced in July 2018 to protect the Union steel market against trade diversion, following the US decision to impose, under its Section 232 legislation, duties on imports of steel into the US market.
The US Section 232 measures are still in force.
In accordance with the requirements under EU and WTO rules, the EU found in its investigation that the safeguard measure continues to be necessary to prevent or remedy serious injury to the EU steel industry and that the EU industry is adjusting to a market situation in the EU with a higher level of imports.
What safeguard measures are applied?
In line with WTO rules, the duty-free import quotas of steel will also be increased by 3% annually. The Commission will also initiate a review if the US introduces significant changes to its ‘Section 232’ measure on steel.
TRQs
The safeguard measure takes the form of Tariff-Rate-Quotas (‘TRQs’) reflecting traditional trade flows from third countries, above which a 25% duty is levied on imports.
How do safeguards work?
Unlike anti-dumping and anti-subsidy measures, safeguards do not focus on whether a trade is fair or not, so the conditions for imposing them are more stringent. A country has to show that the increase in imports is:
sharp
due to unforeseen developments
causing (or threatening) serious injury to domestic industry (a higher level of injury than the material injury required for anti-dumping and anti-subsidy)
and that safeguards are in the interest of the country considering these (a requirement beyond WTO obligations)
Another essential feature of safeguards is that they apply to all such imports from all countries (this is called erga omnes).
EU trade policy and safeguards
The safeguard procedure is slightly different from anti-dumping and anti-subsidy, and the decision to apply safeguards always has to be weighed very carefully. So far, safeguards have only been used sparingly by the EU. Imports may also be subject to surveillance if the trend of imports of a product threatens to cause injury to EU producers. Surveillance does not restrict imports – it is a system of automatic import licensing over a limited time – either retroactively or in advance.
As of 15 May 2020, the prior surveillance regime has been replaced by a monitoring system. See: https://webgate.ec.europa.eu/siglbo/post-surveillance
For more on the legal basis of trade defence measures, see Legal basis
EU
EU regulation 2015/478 – imports from WTO countries
CELEX_32015R0478_EN_TXT common rules for
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EU regulation 2015/755 – imports from non-WTO countries
CELEX_32015R0755_EN_TXT - common rules n
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International
WTO agreement on safeguards
25-safeg - Agreement on safegurads
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Download PDF • 68KB