The European Parliament successfully adopted the EU’s new steel import regime, 19 May, introducing significant restrictions to steel importaccessibility to combat the negative impact of global steel overcapacity on the European steel industry.
Members of the European Parliament voted to adopt the regulation at first reading, as well as a joint statement from EU authorities on the continuedaccess of Russian steel slabs to the single market. The regulation was adopted with votes of 606 in support; 16 against; and 39 abstentions.
Approximately halving overall tariff quota volumes, and doubling the out-of-quota duty rate to 50%, the new regulation will serve as a long-termreplacement to the EU’s existing steel safeguard system from 1 July, ensuring no gap is left in the EU’s steel trade defenses as the safeguardreaches its maximum eight year term under WTO rules. Continuing any steel protections (besides anti-dumping and countervailing duty measures)past this eight year deadline is legally complex, requiring negotiations under the WTO General Agreement on Tariffs and Trade (GATT) Article XXVIII toseek trading partner agreement to increase the EU’s base tariff rate to 50%, from its current 0% or minimal level.
Further complicating matters are the EU’s various Free Trade Agreements (FTA), which cover the majority of steel imports to the bloc. The regulationwill apply the tariff increase, and quotas restrictions, on all steel trading partners regardless of FTA status, though FTA partners will very likelyreceive higher volume allocations to relevant quotas, than non-FTA WTO members.
Adopted alongside the regulation is a joint statement from the EU Commission, Council, and Parliament, that clarifies that existing sanctionsexemptions for Russian steel slabs will continue until the end of September 2028. While the new import regime specifically prevents the opening ofquotas for sanctioned countries (i.e Russia), semi-finished steel – including slabs – are not included in the scope of the regulation, and so theiraccess to the single market remains unaffected from July.
Rapporteur for the drafting of the regulation, Karin Karlsboro, spoke in the European Parliament the evening prior, stating that EU authorities hadreached an agreement to bring a “sharp end” to Russian steel imports, describing the blocking of Russian supply as the “lowest-hanging fruit” inthe context of tackling overcapacity. However, it is unclear how the statement, or wider regulation in any way adjusts the existing treatment ofRussian steel slabs, leaving the existing phase-out schedule untouched despite industry calls for an early ban to the exemption.
McCloskey has closely followed the drafting process of the new steel import framework since it was first announced in the European Commission’sSteel and Metals Action Plan (SMAP). McCloskey exclusively broke details of the regulatory proposal in October last year, confirmed by the official publication of the proposal the following week.
Since then, the regulation has undergone several amendments as part of the EU’s trilogue process, including bringing back a temporarycontinuation of the previous carry-over mechanism for the new regulation’s first year, allowing unused quota allocations to be transferred to thenext quarter. The Commission announced
that lawmakers had reached a provisional agreement to adopt the regulation in mid-April – with McCloskey’s sourcing and analysis of the finalnegotiated text detailing:
- factors for consideration in the Commission’s allocation of quota volumes to specific trading partners (details remain unavailable);
- how quotas for Free-Trade Agreement (FTA) partners will be administered;
- the inclusion of “melt and poured” criteria as a traceability mechanism, to be considered as the basis for allocation to country-specific quotas;
- the logistical and temporary continuation of the carry-over mechanism, to be reviewed after the new regulation’s first year;
- review processes to potentially extend protections to downstream products, with first products to be assessed before end-of-year;
- the scope and oversight of the Commission’s power to adjust quota levels.
Ultimately, the official adoption of the regulation clarifies little for European importers of steel that they did not already know – both due to the timesince the original regulatory proposal, and the lack of details on the allocation of these adopted quota levels to specific origins. Operationally, theseimporters remain in the dark when trying to assess cost risks on the international market, and distributors are either holding back from importing asa result, or have already shifted the burden to traders via DDP purchasing as a result of 2026’s other regulatory blow to trading confidence: theCarbon Border Adjustment Mechanism (CBAM).
Speaking in the European Parliament the evening prior, the Commission stated EU trade representatives were actively negotiating with “over twentytrading partners” in Geneva as part of the Article XXVIII process – commenting that the EU was being “very transparent” about its desired outcome,and methods, for the discussions.
The adopted text can be found here.
Author: Benjamin Steven
