BRUSSELS — The EU announced Tuesday it would double its tariffs on steel to 50 percent, in line with U.S. levels, in a bid to bring the Trump administration to the negotiating table and hammer out a deal to get them back down again.
The proposal, details of which were already reported by POLITICO, would also slash tariff-free quotas by 47 percent to 18.3 million metric tons — in a bid to address global overproduction and a slump in European output that has left a third of its steel production capacity idle.
The measures are being done in “a European way,” Trade Commissioner Maroš Šefčovič said at a press conference in Strasbourg.
“What was clear, coming from the U.S., was the question: ‘Look, we already adopted very robust measures — what are you Europeans going to do?’” he told reporters. “We decided to do it in our European way. It means we keep our markets open and we are offering quotas for our partners.”
EU ‘protecting its industry’
The measures would put up a barrier for cheap steel that the European industry can’t match on price — in large part due to high energy prices and stricter environmental rules. The Commission’s industry chief, Stéphane Séjourné, insisted that they are in line with trade law.
“The EU is changing its doctrine and protecting its industry,” Séjourné said. “But we’re doing this in line with our values and international law.”
If EU countries and the European Parliament agree, the tariffs would replace the existing safeguards that are due to expire next June.
Norway and Iceland, as members of the European Economic Area, would not be affected by the quotas and tariffs, but Switzerland and the U.K. would be at first. The EU will hold talks with its most significant suppliers after it formally informs the World Trade Organization of the new measures.
Also exempt from the measures is Ukraine, as “a candidate country facing an exceptional and immediate security situation,” the Commission said in a statement.
The European steel industry, represented by lobby group Eurofer, welcomed the measures, which were in line with what it had been asking for.
“This is a major leap forward to defend the sector,” the organization’s Director-General Axel Eggert said in a press release. He added he’s hoping “for a renewed dialogue with the Trump administration to lift the current 50 percent tariffs on EU steel imports.”
Man on a mission
Šefčovič said he would travel to South Africa for a G20 ministerial meeting this weekend and discuss the measures with his counterparts at the Global Forum on Steel Excess Capacity.
“We remain committed to a rules-based trade system and our global network of free trade agreements — including with key steel-producing countries,” he told reporters. “But we must also act decisively to defend Europe’s interests.”
These talks should result in assigning a slice of the quota cake for each major exporting country so that their producers can continue to send some steel toward Europe tariff-free. Further negotiations might result in compensating these countries in other ways, for instance by expanding quotas for different products or lowering tariffs elsewhere.
The real aim, according to a senior Commission official who spoke earlier Tuesday, is to find a global solution for the global problem of overproduction in the steel industry.
“We have a global problem, so this requires really a global solution that has to touch on everybody,” the Commission official said about the global measures. They were granted anonymity, as is customary, to brief ahead of the announcement.
The world produces more steel than it consumes and the total capacity of all plants around the world adds up to five times the European demand.
With the plans, Brussels would match Canada’s steel protections but not go as far as U.S. President Donald Trump’s 50 percent tariff, which applies from the first ton on virtually all imports. The U.S. also charges tariffs on consumer products, such as motorcycles, for the amount of steel they contain.
Stepping stone
The proposal is meant as a “stepping stone” for a better deal with the United States, as the two sides agreed back in July, the senior official said.
Šefčovič noted that transatlantic trade in steel was modest, making the EU and United States natural allies in the fight against overcapacity: “We are taking on the challenge of global overcapacity ourselves and it would be much more efficient if we did it together, or with like-minded partners,” he told reporters.
The EU’s 50 percent tariff — even though it applies to fewer imports than Trump’s — is “going to be a very good basis for us to engage with the United States,” the official said. They added that the bloc would hope that the proposal creates an “opening to be able to have a negotiation so that we move away from the current 50 percent that affect our steel exports to the U.S.”
The official admitted that “we would have liked to have a different situation with the United States in general and certainly in steel.”
Alongside this full legal proposal, the Commission will also ask all EU countries — represented in the Council — for permission to inform the WTO formally about the intention to reduce quotas and raise tariffs. Trading partners that qualify as a “significant supplier” will then be able to enter into bilateral negotiations.
This story has been updated.
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