The European Union is determined to defend its steel production from global competition, driven by overproduction in several countries around the world. The European Parliament and the Council of the European Union reached an agreement this week on a new regulation to protect the bloc’s steel market. The main measures are a reduction in duty-free imports, non-quota tariffs doubled to 50 percent and new traceability rules on the origin of imported steel. The institutions also pledge a gradual farewell to Russian steel, instead opening the market to Ukrainian production.
“It is essential to counteract the negative effects on trade resulting from global production overcapacity on the EU steel market”, claimed the negotiator for the Chamber, the Swedish liberal Karin Karlsbro. “Geopolitical uncertainty makes a strong steel industry indispensable for Europe’s resilience”, and the agreement reached guarantees “a competitive future for European steel”, having the “tools to defend it from unfair competition”, added the President of Parliament Roberta Metsola.
The agreement must now be formally adopted by both institutions: the plenary vote in the European Parliament is expected in May, with the aim of the regulation coming into force on 1 July 2026.
Why this intervention
The EU adopted safeguard measures on steel in 2018, during Donald Trump’s first term as US president, in response to 25 percent tariffs imposed by Washington on steel and aluminium. That decision had pushed a significant share of world exports towards the European market, which was more open and less protected. The safeguard measures, adopted under the World Trade Organization (WTO) Safeguards Agreement, set duty-free import quotas and applied a 25 percent levy above those thresholds.
However, global production overcapacity has continued to grow and is estimated to reach 721 million tonnes by 2027, more than five times the annual consumption of the entire Union. Further complicating the situation is the fact that, in his second term, Trump imposed 50 percent tariffs on steel and aluminium, worsening the pressure on imports to Europe. The utilization rate of European steel plants has fallen to 65 percent, well below the 80 percent threshold considered sustainable, with employment losses estimated at around 100 thousand jobs from 2008 to today. In 2024 the main steel exporting countries to the EU were Türkiye, South Korea, Indonesia, China, India, Ukraine and Taiwan.
To respond to this situation, last October the European Commission presented a proposal to build a new instrument, also because WTO rules do not allow safeguard measures to be extended beyond eight years. Those in force, having been first introduced in 2018, are now due to expire on 30 June.
Reduced fees
The heart of the new regulation is the revision of the so-called system Tariff-rate quota (Trq), i.e. tariff quotas: a mechanism that allows you to import a certain quantity of goods at zero (or reduced) duty, while instead applying higher tariffs on imports that exceed that threshold. It is a widespread tool in international trade, which allows guaranteeing minimum access to markets while protecting domestic production from excessive flows.
The new regulation sets the overall volume of duty-free imports at 18.3 million tonnes per year, with a reduction of 47 percent compared to the quotas in force in 2024. Above this threshold a duty of 50 percent will apply, compared to the current 25 percent. The regulation covers 30 categories of steel products, from hot rolled to cold rolled, from coated to tubes.
“We managed to guarantee the rapid extension of the list of products covered by the safeguard, also including the downstream sectors, to protect strategic supply chains such as automotive, mechanics, household appliances, construction and shipbuilding”, claimed Brando Benifei, Coordinator of the Socialists and Democrats in the International Trade Commission and negotiator of the new safeguard instrument for steel. Benifei said he was “particularly pleased to have achieved an accelerated timetable for the inclusion of four key products across the entire value chain: alloyed and stainless steel wires, forged bars, pipes, pipes and cast iron hollow profiles”.
For the first twelve months of application, quotas not used in a quarter can be carried forward to the following quarter, for all products. From the second year onwards, the Commission will evaluate on a case-by-case basis whether to allow this mechanism for specific categories, taking into account the level of import pressure, the rate of quota use and the availability of supply for industries using steel as a raw material.
The origin of steel
One of the most important innovations concerns the traceability of imported steel. The regulation introduces the principle of “melt and pour”, a criterion that identifies the country in which the steel was originally melted in a furnace and then poured into its first solid form, regardless of where it is then processed or transformed. In practice, it matters not only where a pipe was built or a sheet of steel rolled, but where the material was first produced in a liquid state.
This criterion serves to avoid the so-called “triangulation”: Chinese or Russian steel being shipped to a third country, minimally processed, and then re-exported to the EU with a different origin, bypassing duties. The agreement states that the country of smelting and casting will be one of the factors used to allocate tariff quotas to exporting states. Within two years of entry into force, the Commission will then have to evaluate whether to make this criterion the exclusive basis for allocations and, if necessary, present a new legislative proposal.
Russia outside, Ukraine inside
On a geopolitical level, the regulation contains two opposing provisions. In a joint declaration attached to the text, the Parliament, the Council and the Commission “reaffirm their commitment to reducing economic dependencies on Russia”, with the aim of completing the elimination of imports of Russian steel products by September 2028. This is a weakening of the requests of the Parliament, which would have wanted a binding commitment, but still a signal.
The EU has adopted a series of economic sanctions against Moscow over the years in response to the invasion of Ukraine. Among these measures, since March 2022 Brussels has included a ban on the import of iron and steel products originating in Russia.
However, under the current sanctions framework, not all flows of Russian steel are automatically permanently blocked: some semi-finished products and raw materials can still be imported or transit through third countries if they do not expressly fall into prohibited categories or if it is not rigorously demonstrated that they contain material of Russian origin. And so in 2025 alone, approximately 3.7 million tonnes of steel slabs arrived from Russia to the EU.
Inversely, the agreement provides that Ukraine, as a candidate country for EU membership facing “an exceptional and immediate security situation”, i.e. the invasion by Vladimir Putin’s Russia, has access to a system of duty-free quotas in the allocation of imports.
Higher duties
Under the current system, a Turkish steel mill that exports to the EU beyond its annual quota pays a 25 percent duty on the value of the goods. From 1 July 2026, that same steel mill will pay 50 percent: a measure that should make massive exports to the European market less convenient and favor local producers. The declared objective is to bring the utilization rate of European plants back to 80 percent.
The agreement also introduces an accelerated review mechanism: within six months of entry into force, the Commission will have to evaluate whether to extend the scope of the regulation to products not currently covered, such as tubes, pipes and certain types of forged bars. Within twelve months, a second review may extend coverage to products containing a significant amount of steel, to prevent them from being used as an alternative channel to circumvent the measures. Subsequent reviews are scheduled every two years.
