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| steel trade defence |
EU’s New Trade Defence Measures Could Reshape Global Scrap and Steel Flows
The European Commission’s proposed overhaul of its steel trade defence regime marks a decisive policy shift. If approved, the new system will reduce tariff-free steel import quotas by 47% and double above-quota tariffs from 25% to 50%. These measures are poised to take effect from July 1, 2026, subject to approval from the European Parliament and Council of Ministers.
The move is aimed at addressing global steel overcapacity, forecast to hit 721 million tonnes by 2027, five times EU demand. The focus keyphrase, “EU steel tariffs,” lies at the core of the Commission’s strategy to stabilize its internal market and protect its steel sector against unfair trade dynamics.
Key Policy Shifts and Implications for Scrap Metal Markets
The revised framework will significantly affect import-dependent downstream sectors and upstream scrap flows. The quota cut—from 33 million tonnes to 18 million tonnes annually—represents a sharp 13% market share ceiling for non-EU steel. Simultaneously, the above-quota tariff hike to 50% creates a stronger disincentive for over-quota imports.
Importers will also be required to declare the "melt and pour" origin of all non-EU steel, enhancing traceability but potentially complicating compliance for third-country producers. In contrast to the current system, unused quarterly quotas will no longer roll over, effectively tightening the cap further.
This shift aligns EU policy more closely with recent U.S. and Canadian trade defence actions, signaling a coordinated Western effort to ring-fence domestic steel markets. However, this also increases the risk of retaliatory tariffs on EU exports, as the reclassification from “safeguards” to “defence measures” alters the EU's position under WTO trade law.
Industry Response and Transatlantic Outlook
The European Steel Association (Eurofer) welcomed the proposal as a “major leap forward to save EU steel.” The group called for an urgent fast-track of the new framework to ensure market certainty ahead of the 2026 implementation date.
Additionally, steel trade association Eurometal urged the Commission to extend the new rules to include steel derivative products, noting that many high-steel-content finished goods escape current safeguards and the Carbon Border Adjustment Mechanism (CBAM). These gaps, they argue, distort competition and weaken Europe’s industrial base.
Meanwhile, Brussels and Washington are progressing toward a joint mechanism that could replace Section 232 tariffs with a shared tariff-rate quota system for steel and aluminium. If realized, this cooperation would reshape transatlantic scrap flows, influencing trade volumes, investment patterns, and carbon mitigation strategies across both markets.
ScrapInsight Commentary
The EU’s tariff escalation signals a more assertive stance on trade defence, with likely spillover effects on global scrap markets. While reduced import volumes may boost local scrap demand, retaliatory risks and CBAM overlap require careful monitoring. Stakeholders must now navigate a tightening regulatory landscape shaped by protectionism and decarbonization.
