EU extends steel safeguards till June'26, Japan raises concerns

The European Union (EU) has decided to extend its steel safeguard measures (SG) until June 2026. These measures are import restrictions implemented to protect the European steel industry. However, this extension has raised concerns from Japan's Ministry of Economy, Trade and Industry (METI).

METI specifically objects to the EU's decision to introduce a 15% cap on the amount any single country can export under the tariff quota (TRQ) for certain steel products like hot-rolled steel sheets. Previously, these quotas were filled on a first-come, first-served basis.

Moreover, METI argues that this cap significantly tightens import restrictions and goes against the principles of the World Trade Organization (WTO). They plan to lobby the EU for its removal.

However, the EU implemented the cap to avoid market disruptions caused by a surge of imports at the beginning of each quota period. They argue it will create a more stable market environment.

The EU's steel safeguards are a response to similar measures taken by the United States in 2018. Both actions have been criticised by various countries, but the EU has chosen to extend its safeguards for a third time.

In addition, METI acknowledges that WTO rules allow for safeguard measures during emergencies like a rapid increase in imports. However, they believe the EU's actions, particularly the cap on TRQs, go beyond what is necessary and strengthen import restrictions to an excessive degree.

Note- This article has been written in accordance with an article exchange agreement between Japan Metal Daily and BigMint.