The European Union is looking to reorganise its restrictions on steel imports in a preemptive decision to protect the bloc from majors economic fluctuations as it recovers from the fallout of the coronavirus pandemic.
“It is fundamental that the gradual resumption of activity and return to normality take place in an orderly manner, in such a way that all participants in the EU steel market find their traditional place,” the European Commission said in a notice on Friday evening.
“The proposed adjustments should deter any undue stockpiling behavior in the very early phases of the recovery that could empty the market in an opportunistic manner,” the commission said.
“These opportunistic practices not only seriously endanger the obligation to preserve traditional trade flows in terms of origins, but also risk unduly displacing domestic production.”
The measures will see the introduction of a 25% tariff on imports of 26 steel types including stainless hot-rolled, cold-rolled sheets to rebars, and railway material after those shipments surpass the three-year average.
The new regime does not include quota-reductions, however, which have been called for by the European Steel Association - which represents producers in the bloc.
The importation limits or tariff-rate quotas (TRQ) will see a shift to quarterly management of all country-specific quotas and will replace a global TRW for hot-rolled flat products with combined country-specific quotas for the largest suppliers and residual quotas others.
A global TRQ for stainless steel hot-rolled sheets and strips will also be introduced. Two sub-TRQs will replace the TRQ for large welded tubes. Separate quotes for tubes which are generally used in large engineering projects and another for those which are not.
Ability to access residual quotas for countries that have reached the capacity of the existing limitations.
A successful response to the coronavirus health crisis must go hand in hand with a strong recovery plan for our economies. We've made available significant funds to support health systems, companies & protect Europeans’ jobs. But more is to come. We need a Marshall Plan for EU. pic.twitter.com/q6jHY4BZrx— Ursula von der Leyen #UnitedAgainstCoronavirus (@vonderleyen) April 15, 2020
The changes are geared to begin on 1 July and will apply to import curbs brought in two years ago to prevent flooding of the European markets after the US introduced a 25% tariff on imports.
The EU economy has plummeted as a result of the coronavirus and the subsequent national lockdowns introduced by member states. A collapse in steel consumption and production led to concerns over export-driven economies such as China potentially stockpiling and shipping to Europe en masse as economies begin to reopen.