The European Commission, led by Ursula von der Leyen, has proposed a 50% tariff on steel imports exceeding an annual quota to shield the EU’s metals industry from global overcapacity and U.S. trade measures. This protective move comes as part of a broader strategy to counter Trump’s trade policies.
The proposal was built on an earlier agreement struck with U.S. President Trump, which the EU viewed as one-sided, setting a baseline 15% tariff on most exports from the bloc, while leaving steel and aluminum at 50%. The measure requires approval from the European Parliament, and if passed, would significantly reduce the existing tariff-free quota and double the rate on excess steel. The plan also requires importers to prove the origin of the steel, with quotas reset close to 2013 levels.
Under the plan, importers would have to prove where steel was melted and poured, and quotas would be reset close to 2013 levels. Von der Leyen’s protectionist measure needs approval from the European Parliament but if passed will significantly reduce the existing tariff-free quota and double the tariff on excess volumes from 25% to 50%.
The EU’s domestic steel sector was operating at only 67% capacity last year, and showed record losses, a slump which was only worsened by Trump’s tariffs. The US, the bloc’s biggest customer, imported around $8.7 billion worth of iron and steel goods last year, according to S&P Global. However, the new tariffs would hit the UK hard, as about 78% of its steel exports go to the EU, according to trade data.
UK industry leaders have warned that the new measures could be devastating if implemented, the BBC reported on Tuesday. The proposal, which is yet to be approved by the European Parliament, highlights the ongoing trade tensions between the EU and the U.S., as well as the potential economic impact on countries reliant on EU markets for steel exports. The protectionist approach taken by the EU raises questions about the future of international trade relations and the effectiveness of such measures in addressing the challenges faced by the steel industry.