Europe has officially extended its steel import tariff for another three years. Importing steel to Europe will cost other countries dearly. This will protect EU producers from cheap sales in some Asian countries. It remains to be seen what effect this will have on global market prices. In the following, we will evaluate this issue.
*** European steel import tariff extension for three years
For another three years, the European Union (EU) has deliberately extended its support measures for the import of some steel products. The European Commission has argued in its policy document that the recent rise in steel prices in the EU steel market cannot be the result of these policies because such high prices also prevail in world markets. This extension will take effect on July 1, 2021. Initial safeguards were taken in July 2018 to protect the EU steel market from price turmoil in the European market.
Following the US decision to impose tariffs on steel imports into the US market under Act 232. Actions of US Bill 232 are still ongoing. The law targets the state of European steel trade with the United States. The European Commission has argued in its policy document that the recent rise in steel prices in the EU steel market cannot be the result of these policies because such high prices also prevail in world markets.
*** Unanimous request of European countries to extend steel import tariff
The decision to extend the protection measures follows an inquiry by 12 EU member states into the fulfillment of the extension conditions. In accordance with the requirements of EU and WTO law, the Commission found in its investigation that safeguards were in place to prevent or compensate for serious damage to the EU steel industry, and that the EU industry was adapting to market conditions. The European Commission has extended protectionist policies because of what it calls the fragile financial situation of the EU steel industry. On June 11, the European Union informed the World Trade Organization of its willingness to extend its protectionist policies, which were approved by member states on June 18.
*** Annual growth of European steel toll percentage
The Commission conducts a long-term monitoring and review to ensure that there is a balance in the European steel market and that the continent’s steel economy is not under pressure. According to WTO rules, the duty-free import quota for steel is also increased by 3% annually. The Commission will also make changes if the United States makes significant changes to its Section 232 on steel. Although these policies were welcomed by steelmakers, they were not favored by traders, as they anticipate more pressure on prices in the market. European steelmakers have been calling for the policies to be extended for months, while some downstream steel companies and traders have expressed concern that the move could increase current high steel prices and exacerbate supply shortages, especially in rolled and galvanized products. .
*** Benefits of extending steel import tariff for European artisans
This extension provides ample opportunity for consumers to obtain and supply the materials they may need from abroad, as the level of tariff-free quotas is currently at least 15% higher than the level of imports recorded in previous years. 2015-2017. This measure will mainly provide a secure economic network in the event of a sharp increase in imports. This protection measure is in the form of a tariff-quota rate (‘TRQ’) reflecting the traditional trade flow from non-EU countries, which receives 25% of the import duty. The Commission has reviewed the performance of these measures twice – in October 2019 and July 2020. Following a reasoned request from 12 EU member states, the Commission of Inquiry concluded in February 2021 that support for steelmakers should be maximized and This plan should be extended for another three years.
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