EC mulling safeguards in reaction to section 232: sources

The European Commission is considering introducing its own safeguard measures against steel imports to counteract a potential influx if the US introduces its section 232 order next week.

The US Department of Commerce is investigating the impact of steel imports on the country’s national security and, according to Commerce Secretary Wilbur Ross, the result could see tariffs increased beyond the current anti-dumping duties, the introduction of a quota system, or a hybrid of the two (see other story).

European steel producers have criticized the action and one source warned of a “tsunami” of steel forced towards the European Union market. “If he [President Trump] imposes that, there’s going to be an awful lot of steel floating around that doesn’t have a home anymore and logically that would go to Europe, destroying whatever we have here,” a mill source said.

S&P Global Platts understands the EC is investigating a similar action to the one taken in 2002 in reaction to then President George Bush’s section 201 order, which imposed three-year tariffs of 30% on eight of 16 categories of steel imports.

The EC responded by introducing non-discriminatory tariff rate quotas in which a certain volume was allowed in duty free with a duty applied to tonnages above this. The quota was roughly equivalent to 2001 import levels. “It’s really at the initiative and at the level of the EC itself. It’s not like a trade case where we drive it and have to explain everything, this is more the EC looking at it from a trade potential,” another producer said.

A trade lawyer confirmed any measure would not take the form of a duty. “The European Union 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 EU (a requirement beyond WTO obligations).”

The European Commission did not respond to requests for comment by the time of publication.

Peter Brennan and Annalisa Villa, PLATTS