The European Union on Monday extended its steel safeguard, saying it will run from July 1, 2021 to June 30, 2024, with an automatic annual liberalisation of 3%.
Eurofer (European Steel Association) welcomed the move and said the conditions that required the launch of the safeguard initially were still very much present – including global steel overcapacity and US Section 232.
“This extension provides ample opportunity for users to source material they might require from abroad, as the tariff-free quota level is now at least 15% higher than the record import levels on which the safeguard’s tariff rate quota is set – the years 2015-2017”, said Eurofer Director General Axel Eggert.
This measure mainly provides a safety net in the event that a sharp surge in imports occurs, he added.
The EU steel safeguard is not a measure to stabilise prices on the domestic market, and it does not restrict normal supply to the market. European downstream users of steel can still access all the third-country steel they need based on traditional trade flows.
Over the past three years, the size of the unused quota has grown – and there is plenty of space in the tariff-free quota for users to satisfy their material needs, Eurofer said in a statement.
“The current state of demand-supply disruption in the global steel industry – and in many other sectors – follows in the wake of the COVID crisis. However, it has nothing to do with the safeguard”, Eggert said, adding that instead, the recovery of steel demand and the wider economic rebound has inspired a rush for material after the countercyclical destocking seen during the downturn”.
The EU steel safeguard extension was voted upon by EU Member States on 18 June 2021. WTO members were notified of the proposed extension on 11 June 2021.