The European Union has implemented a new regulation aimed at addressing the negative trade effects of global overcapacity on its steel market. This new framework introduces annual tariff-rate quotas (TRQs) for steel imports, totaling 18.35 million tonnes. This figure represents a substantial 47% reduction compared to the allowances in 2024, as reported by the European Parliament. The decision reflects the dire situation of the Union's steel industry, which has seen over 30 million tonnes of production capacity lost since 2018 and approximately 30,000 jobs shed in the same period.
Under the new regulation, imports exceeding these tariff quotas will be subject to a significantly increased out-of-quota duty of 50% ad valorem. This is double the previous 25% tariff set under Implementing Regulation (EU) 2019/159. The hike is intended to minimize the risk of trade diversion and protect the Union's domestic industry against the influx of steel from regions with continuous capacity additions, which are expected to push global overcapacity from 602 million tonnes in 2024 to 721 million tonnes by 2027.
The regulation also mandates a "melt and pour" requirement, obliging importers to provide verifiable evidence, such as a mill test certificate, proving the country where the raw steel or iron was initially produced in liquid form. While the total annual volume of tariff quotas is set at 18,345,922 tonnes, the country-specific allocations are still under negotiation and will be defined in a separate implementing act. Until then, quotas will operate on a global basis. Imports from Iceland, Liechtenstein, and Norway are excluded from these new quotas and duties due to the European Economic Area Agreement.
