EU Slashes Steel Import Quotas and Raises Tariffs to 50 Percent

The European Union has nearly halved its tariff-free steel import quotas and imposed a 50 percent duty on excess shipments to protect domestic producers from global overcapacity.Under the rules, the EU’s annual tariff-free import quotas are cut by 47 percent to 18.3 million metric tons, while an out-of-quota duty of 50 percent ​is introduced for 26 categories of steel products imported into the EU.The rules, ​which came into effect on July 1, seek to increase steel capacity ⁠utilization in the bloc to 80 percent, the European Commission (EC) said.It said that this was the EU’s response to “persistent global overcapacity in the steel sector,” which it added “remains a serious global problem and continues to distort international markets.”In a statement on July 1, the European Steel Association (Eurofer) welcomed the entry into force of the EU’s new steel trade measure, calling it a “historic shift.”It said that it safeguards Europe’s “steelmaking capacity.”“This is a game changer for Europe’s steel industry,” said Axel Eggert, director general of Eurofer, commenting on the measure.Eggert said that EU steelmakers are likely to claw back some 15 million metric tons of production, about half of what has been lost over the ​past few years.“After years of mounting pressure, the EU has recognized that maintaining steel production is fundamental to Europe’s competitiveness, security, and decarbonization. The industry was facing the abyss,” he said.“Today’s measure gives us the breathing space to rebuild, but it is only the beginning.”Eurofer also said the measure supports “decarbonization.”Separately, Eurometal, which represents the steel distribution and trading chain, said that six major European steelmakers on July 2 had committed more than €10 billion ($11.4 billion) to “low-emission steel production.”According to the new rules, the EU said that half of the import quotas have been reserved exclusively for free-trade ​agreement (FTA) partners, with the other half available to all trading partners, including those with an FTA.“The EU’s FTA partners will, therefore, retain a significantly higher share of EU market access than the average reduction of 47 percent foreseen by the Steel Regulation,” it said.A “significant number” of partners ​have provisionally agreed with ​these allocations, the ⁠EC added.The regulation also introduces a “melt and pour” rule, under which the origin of steel is determined by where it is first melted and cast.The EU measure is partly a reaction to America’s steel tariffs.In June, Eurofer said that EU steel exports to the United States had fallen by 34 percent since Washington hiked tariffs to 50 percent.Steel exports to the United States fell to 1.94 million metric tons in the three quarters since the Trump ​administration doubled import tariffs on steel and aluminum from 25 percent a ​year ago.EU producers exported 3.4 million tons to the ⁠United States in 2025, compared with 4.1 million tons in 2024 ​and 4.7 million tons in 2017, Eurofer added.China’s Ministry of Commerce spokesperson, He Yadong, said on May 21 that if the EU creates a new trade tool targeting China over overcapacity, Beijing would view it as an attempt to cover up Europe’s own industrial problems and suppress external competition.He warned that if the EU moves forward with the new tool and imposes restrictions on Chinese companies or products, China would take countermeasures.China has also challenged existing EU enforcement actions.On May 15, China’s Ministry of Justice said EU cross-border investigative practices under the bloc’s Foreign Subsidies Regulation, in a probe involving Chinese security-screening equipment maker Nuctech, constituted improper extraterritorial jurisdiction. The notice said organizations and individuals must not implement or assist with the EU measure.Arthur Zhang and Reuters contributed to this report.