The European Commission will “unavoidably” soften its European Union steel import safeguards when the current scheme expires on June 30, 2021, a well-known European steel sector lawyer told a market webinar organized by European steel distributors’ association EUROMETAL Nov. 20.
“The European Commission is making soft messages in favor of repealing the measures,” said Yuriy Rudyuk, partner in law firm Van Bael & Bellis. “A shift to softening of the measures is unavoidable but the outcome is so far unpredictable.”
What happens will also depend on the position of the administration of incoming US President Joe Biden, which could potentially bring a softening but not a dismantling of the US’ Section 232 import tax measures on steel, the lawyer said.
The EC introduced steel import safeguard curbs based on quota limits in July 2018, in response to US President Trump’s introduction in March 2018 of Section 232 import tariffs on imports of products including steel, which diverted third country steel to the traditionally-open EU market.
The EU safeguards system has been designed to last just three years. Rudyuk stressed that if it lasts longer than this, trading partners are likely to present compensation requests or retaliate.
However, EU steelmakers’ association Eurofer on Nov. 3 filed a formal request for initiation of a transparent review of the safeguards system and their extension beyond June 30, 2021.
The EC is typically viewed as an organization which serves to protect the interest of civil society and end-consumers, which may arguably have experienced price inflation as a result of the import curbs.
Alessandro Sciamarelli, Eurofer director of market analysis and economic studies, also speaking at the webinar, noted that steel import levels into the EU fell by 13% in 2019 from 2018 levels, reflecting the existence of the safeguard curbs, which helped to protect a depressed market.
While EU imports are expected to decline by a further 19% in 2020 in a market battered by coronavirus shutdowns, according to Eurofer’s latest forecast, these are still considered high, having reached a record 22.3% market share of the flat products market in Q2.
UK safeguards
The UK on Sept. 30 introduced its own steel import safeguards system, based on the methodology of the EU system, ahead of the end of its transition period to exit the EU on Dec. 31. Rudyik noted that the UK initiated on Oct. 10 a transitional review to determine whether the measure should be maintained on 19 product categories after June 30, 2021, when the current EU safeguards system will expire.
— Diana Kinch
