European Union Extends Restrictions on Steel Imports till 2021

According to the latest updates, European Union (EU) will continue its restrictions on the imports of steel into the region until July 2021.

The 28-nations bloc has put an effective cap on steel imports to counter concerns of EU producers that European markets could be flooded by steel products that are no longer being imported into the U.S.

In July last year, EU had imposed provisional safeguard measures on 23 steel products for the period of six months i.e. till 4 Feb'19. The EU's safeguard measures imposed for next three year involves a quota set at the average level of imports over the past three years, plus 5%. A 25% tariff would apply once the quotas are filled.

There are also specific limits for major exporting countries. The quotas would apply for three-month periods in order to limit stockpiling and could also be increased by 5% each year.

According to EU, the steel imports into the region has increased significantly from March 2018 after the U.S. imposed 25% import tariffs on steel. The key steel exporting countries for EU are China, India, Russia, South Korea, Turkey, and Ukraine.

India has been highly concerned about the European Union tariffs as India exports nearly 6% of its domestic steel production to Italy. India's steel exports to the U.S. are less than 1% of its total domestic production. Also, the EU's tariffs will also magnify the fears of steel cross-dumping into India.

Although the steel mills in EU are welcoming this move of restrictions on steel imports, European auto manufacturers association ACEA has called the measures protectionist. It has said that steel exports to the United States have only dropped slightly and so little extra steel has been diverted to Europe.