The European Commission has launched a targeted consultation requesting feedback on the product scope of the EU’s new steel tariff-rate quotas (TRQs), as part of the measure’s embedded review mechanisms.
The consultation is open until 30 September, and seeks responses from steel producers and consumers, importers, traders, and consultants, as well as various associations and authorities across the steel value chain.
Under the new steel regulation – which entered into force 1 July, intensifying the EU’s steel tariff-rate quota system – the Commission is compelled to assess the “necessity” of adding additional steel products via legislative amendment to its protective coverage before end-of-year, more specifically:
- Tubes, pipes, and hollow profiles of cast iron (7303 00 10, 7303 00 90)
- Non alloy and other alloy wire (7229 20 00, 7229 90 20, 7229 90 50, 7229 90 90);
- Stainless wire (7223 00 11, 7223 00 19, 7223 00 91, 7223 00 99);
- Non alloy and other alloy forged bars (7214 10 00, 7228 10 50, 7228 40 10, 7228 40 90)
The questionnaire asks respondents whether they perceive any effects from global overcapacity on the EU market across the listed product categories, and to submit relevant evidence, as well as reciprocity-based questions on similar market access policies in third countries. Dedicated questions for steel producers seek responses on circumvention routes; while sections for downstream users investigate potential domestic supply and cost inflation risks, and the substitutability of said product categories in downstream processing.
Further review mechanisms within the regulation would then assess extension to imports of downstream steel-containing goods, by 30 June 2027.
McCloskey’s market sources have described the entry into force of the EU’s new steel TRQs as a “new era” for European steel trade, due to the complexity of the new measure, significant cuts to duty-free import volumes across trading partners, and the doubling of out-of-quota duty rates to 50%.
A primary concern that remains for market participants, however, is that protective efforts for upstream goods risks downstream steel consuming industries being forced to replace their domestic steel sourcing and processing operations with the substitutive import of comparatively unshielded finished manufactured goods, to sustain their competitiveness on the global market.
While this consultation will be welcomed by many in the steel value chain, others will likely see the proposed extension as much too slow, such as European steel trade and distribution association EUROMETAL, which has repeatedly called for more immediate and wide-ranging protections for steel-containing goods to prevent – or at least mitigate – an irreversible loss of domestic steel-consuming industrial capacity and demand.
Author: Benjamin Steven
