The introduction of a minimum import price (MIP) by the European Commission in response to the US 232 tariff plan would be preferable to a quota system which “could lead to shortages in the market,” according to International Steel Trade Association (ISTA) Chairwoman Simone Jordan.
As previously reported, the European steel association (EUROFER), is pushing the Commission to respond to the threat of redirected steel, caused by the introduction of a 25% tariff in the US, by introducing a quota that would set a limit on the amount of tariff-free steel that could enter the EU.
A legal source in Brussels said this was the most likely safeguard measure to be imposed, mirroring what the EC did in 2002 in response to a similar US undertaking.
“The safeguard measures normally take the form of an import quota, which is based on the last three years average import volume. It could be broken down per country/supplier of individual products, or just per product, with a global quota which would be allocated on a first-come, first-served basis,” the source said.
Other existing anti-dumping and countervailing duties would remain in force within the quotas, he said. “[They] will be combined in a way in order to avoid double application once the quotas have been exhausted and safeguard duties become applicable,” the source said.
Jordan, however, said a quota would allow only limited volumes from countries that recently increased their market share. “The EU already has all imports of steel under surveillance, so we feel that imposing quotas at this stage would be time consuming and possibly unnecessary,” she said. “With current AD measures in place, quotas could lead to shortages in the market.”
Jordan noted that a 25% tariff might not be high enough to block imports should US domestic markets continue their sharp rise. “We are still awaiting finite measures from [the] US government… [but] if the EU feels it needs to protect its market, the simplest interim measure pending safeguarding would be a reviewable product-by-product minimum import price.”
Peter Brennan, PLATTS