Impact of EU-US Steel Agreement on EU Steel Safeguard Measures
8 December 2021
A coalition of European steel users views as positive the recent announcement that the United States will remove Section 232 tariffs on EU steel and aluminium exports based on past trade volumes, and believes it will help to defuse trade tensions.
However, our coalition also fears that such a move will lead to a worsening of the conditions for sourcing steel domestically within the EU and we would like to reiterate our consistent position that the EU safeguard measures must be reassessed as soon as there is a substantial change in the application of the US 232 tariffs. Therefore, we urge the European Commission to take this important change in circumstances into account in the next review of the safeguard measure on steel imports.
In the past 15 months, our sectors have suffered from acute shortages of steel and very high prices on the European market. The removal of the 25% Section 232 tariff on steel exports will increase the attractiveness of the United States as an export destination for European steel makers – even more so given that US domestic steel is now roughly 70% higher than the EU market price.
Commission Implementing Regulation (EU) 2021/1029 foresees a “functioning review” of the safeguard that will take place in spring 2022. Our coalition strongly urges that the exemption of the EU from Section 232 be analysed as part of such a review, to ensure that both the impact of this decision on the domestic steel market, and its positive effect on the situation of European producers, are taken into account.
We believe that this is important because the potential consequences of this decision do not only justify further analysis, but could also significantly change the nature of the safeguard measure itself.