EU Proposes Major Steel Tariff Hike to Combat Global Overcapacity
The EU Commission has proposed sweeping changes to safeguard the European steel industry. It aims to tackle the global overcapacity, estimated at over 600 million tons, by significantly increasing tariffs and reducing duty-free imports.
The Commission plans to double the tariff rate for imports exceeding the quota to 50 percent. This move comes as a response to the German steel industry's calls for protection against cheap imports, particularly from China. The amount for duty-free imports will be nearly halved, to around 18 million tons.
The EU fears that steel exports previously sold to North America may now be redirected to Europa, intensifying competition. However, the Commission expects cooperation with the United States and Canada, which share similar concerns about global steel overcapacity and have implemented protective measures.
The Commission's proposal needs approval from the European Parliament and EU states to take effect. IG Metall union welcomes the proposal as a step towards job security, and Thyssenkrupp Steel supports the plans to protect the European steel industry. The new EU guidelines, intended to be a permanent regulation, will replace the current protective mechanism expiring in June 2024.
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