EU trade measure unlikely before July, says Rudyuk
The European Commission’s proposed trade measure to replace steel safeguards is an unprecedented change in approach to imports, involving the renegotiation of access to the EU market with all supplying countries, says Van Bael & Bellis trade lawyer Yuriy Rudyuk. This complexity means it is unlikely to be implemented until July 2026.
It may also cause tensions with EU industries other than steel if they are consequently forced to make concessions.
Article four in the proposed legislation sets conditions for establishing country-specific quotas, which raises the big question of how quota allocations will be negotiated with the EU’s multitude of free trade agreement partners. This is likely to be a highly complex procedure since FTAs, signed for example with major steel suppliers such as Korea, Vietnam, Japan, Turkey and the UK, protect preferential trade with the EU and will be very difficult to change.
These partners could therefore have strong legal cases against the EU if the bloc imposes new restrictions on them, Rudyuk told delegates at the EUROMETAL Steel Trade Day in Düsseldorf attended by Kallanish.
The proposed legislation has been reviewed by the European Parliament, with one suggested amendment being to bring forward the first review of whether the scope of the measure needs to be extended. This will be important for many steel market players in order to protect downstream steel users, Rudyuk noted. The EU member states’ Trade Policy Committee weekly meetings are also likely to be discussing the new regime, although these talks are not made public.
The new trade regime includes no exemptions for developing countries. Trade partners will be able to request compensation for restricted EU steel market access by demanding improved access to other sectors, such as chemicals or medical equipment. These EU industries may consequently ask for protection measures of their own. If trade partners are not satisfied, they could retaliate with their own measures.
“Negotiations with FTA members, internal process and the World Trade Organisation consultations … it’s like a Swiss knife. The European Commission today has to … be really in all these points and deal with all these challenging elements. And it may, again, upset a number of industries in the EU,” Rudyuk noted.
Rather than confronting trade partners, therefore, the EU is more likely to aim for a multilateral agreement – or coalition – with like-minded countries, to unite against overcapacity.
“You will have to position your trading elements very well and know when to bring the product, when not to bring the product. But there will be lower availability of the product from abroad, probably because of the 50% duty; that’s very high,” Rudyuk said of the new measure.
The regime is formed of the basic regulation plus numerous implementing acts to follow, dealing with numerous points, and is likely to remain a work in progress for quite some time, meaning it will be very complex. This complexity means it is unlikely the new measure will be implemented until July.
The potential melt-and-pour rule implementation meanwhile brings in a “completely new level of complexity” as it may affect preferential and non-preferential origin rules, he added.
With steel imports being more restricted, there is a risk of more downstream products entering the EU market instead.
“We already see increases now, but with less quotas available, there will be more interest in bringing downstream product, so that may also complicate trading … Perhaps it will be more difficult for smaller companies to continue in such an environment. There’s going to be … lots of regulation, a low level of predictability. So some of the smaller companies may decide we cannot do this anymore because … 50% [tariff] is too risky. So there could be more consolidation of trading activities in the EU,” Rudyuk concluded.
Adam Smith Austria
Europe’s ‘melted and poured’ rules on steel will be made clear by September: Van Bael & Bellis
Speaking at the Eurometal Steel Day and the 10th YISAD Flat Steel Conference in Istanbul on Tuesday April 8, Di Gianni detailed the recent regulations introduced by the European Commission.
The Commission intends to tighten current steel trade defense measures, improve regulations for the prevention of carbon leakage and provide affordable clean energy to support the steel industry, according to a draft version of the European Steel and Metals Action Plan.
One of the most important points in the plan is the ‘melted and poured’ rule, which basically will mean that the Commission will be able to trace the origin of steel exported into Europe.
For example, if hot-rolled coil is exported to Europe from Turkey but the slab used to produce the HRC was from China, the Commission may impose the import duty for slab of Chinese origin. The exporters and buyers will be required to trace the production origin of the end-materials.
Such investigations into the origin may go back retrospectively by three years, Di Gianni said in his presentation to the conference.
Conference delegate Ahmet Soybaş, partner at Soybaş Steel, asked how the origin of hot-dipped galvanized coil would be traced.
For instance, a galvanizer may buy Turkish HRC, galvanize it, and then export it to Europe. The end-producer cannot know the origin of the slab, Soybaş said, because it bought HRC as substrate. Di Gianni said that the European Commission would investigate why the galvanizing was done in Turkey. “Was it in order to [avoid] duties on Chinese HDG? That is the question the Commission will ask,” Di Gianni said.
Tayfun İşeri, coordinator at Colakoglu Metallurgy, asked how end-users such as automotive exporters would know the location of melting. “How will this be traceable?” he asked.
He also said that if a producer used locally produced slab to make HRC for export to Europe, and then used imported slab for HRC to be consumed locally, how would the Commission be able to know the difference in the final materials?
Di Gianni said that details on all these points were not clear yet but the Commission was expected to announce details by the end of the third quarter of 2025.
He added that the Commission was also planning to impose limits on scrap exports from Europe by September.
Fabrizio Di Gianni: EU taking aggressive stand to protect industry
At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, April 8, in cooperation with SteelOrbis, Fabrizio Di Gianni, partner at law firm Van Bael & Bellis, talked about the recent developments in EU trade policy, its Clean Industrial Deal and its Action Plan on Steel and Metals.
Mr. Di Gianni gave details regarding the recent dramatic changes in the EU’s trade policy. He noted that, even though current trade defense instruments continue to play a crucial role, upcoming legislation is equally important for Turkish steelmakers to maintain trade relations with the EU, to keep the possibility of exporting and penetrating the European market, and to gain a strategic advantage.
One of the aspects of the trade policy is the Clean Industrial Deal (CID), which aims to decarbonize energy-intensive industries such as steel and aluminum that are the foundation of industrial growth.
Mr. Di Gianni said there are three main topics in the CID that are of importance to Turkish companies.
One are the Clean Trade and Investment Partnerships (CTIPs), which complement the free trade agreements. Under the CTIPs, clean energy supply chains and strategic trade relations will be strengthened. It will also prioritize clean technologies, renewable energy, and decarbonization.
Secondly, the European Commission (EC) will simplify the Carbon Border Adjustment Mechanism (CBAM) to reduce the burden on the industry, while ensuring carbon-intensive imports are regulated and global decarbonization is promoted. One of the most important changes to the CBAM will be the removal of about 90 percent of importers, mostly small and medium enterprises, from the scope of the mechanism. In addition, the EC will extend the scope of the CBAM to downstream products and to indirect emissions.
Lastly, the CID indicates the possibility of adjusting current tariffs to ensure a level playing field and the strengthening of trade defense instruments such as antidumping and countervailing duties, as well as safeguard measures to cope with the risk of trade frictions, especially as a result of the recent US measures.
Regarding the Action Plan on Steel and Metals, Mr. Di Gianni pointed out that the most crucial aspects of the plan for Turkish companies are the prevention of carbon leakage, and the promotion and protection of European industrial capacities. Therefore, in order to prevent carbon leakage, the threshold for quarterly emissions under the CBAM will be reduced to 50 percent from 80 percent.
The EC is also considering the possibility of extending the CBAM to certain downstream products to eliminate the risk of circumvention. Moreover, as the EC is taking a more aggressive stand, it will change its methods for the investigation. It would normally require evidence that imports from a certain country caused a major material injury.
With the new changes, it will proactively open investigations based on the threat of injury. Furthermore, the commission will launch stronger market surveillance. Also, there might be some modifications to the lesser duty rule, under which antidumping duties are set on the basis of the lowest level between dumping and injury margins. In the meantime, with the introduction of the melted and poured principle, origin will no longer be determined by the country of processing but by the country where the steel was originally melted.
The Van Bael & Bellis official concluded his presentation by saying that, by the third quarter of this year, the commission will consider limiting scrap exports. This could limit access to EU scrap for third-countries recyclers and may reduce the availability of scrap for export, he noted.
