EU to Implement ‘Melt and Pour’ Rule in Steel Trade Defense

EU Steel

New Origin Rule to Combat Tariff Evasion

The European Commission will adopt a "melted and poured" origin rule for steel imports as part of its metals action plan, targeting trade loopholes and reinforcing EU trade defense. Under the rule, the country of origin for steel will be determined by where it is originally melted, regardless of where subsequent processing, such as coating or shaping, occurs.

This change aims to stop the reclassification of steel products that currently enables foreign producers—particularly in China—to circumvent anti-dumping duties. For example, steel melted in China and then converted to hot-dip galvanised steel in a third country can currently enter the EU without triggering tariffs. Under the new regulation, this will no longer be allowed, thus closing a major regulatory loophole.

Expanded Measures for Steel Overcapacity and Carbon Risk

Beyond origin rules, the EU will also strengthen its trade tools by allowing investigations to be launched preemptively based on threat of injury, rather than waiting for proven damage. This preemptive approach is intended to provide faster protection for EU producers in the face of global steel overcapacity and market distortions.

In a further move, the EU will extend the Carbon Border Adjustment Mechanism (CBAM) to cover downstream steel products, including semi-finished and finished components. This will reduce incentives for manufacturers to avoid carbon taxes by shifting emissions-intensive production into complex products exported into the EU.

Industry Response and Market Impact

European steel service centers and distributors have consistently called for stricter protections. The European Steel Association (Eurofer) and other trade bodies welcomed the announcement, highlighting the growing volume of indirect Chinese steel imports into the EU. A representative from a major steel trading company described the new clause as a "game changer" for European steel markets.

The new rules are part of the EU’s broader strategy to defend its steel industry, maintain fair competition, and ensure environmental commitments are upheld without undermining domestic producers.