EU to slash steel import quotas, hike tariffs to 50pc

BRUSSELS, Oct 1 (Reuters): The European Commission will propose cutting steel import quotas by nearly half and hiking duties on volumes above those levels to 50 per cent in line with tariffs imposed by the US and Canada, two sources briefed on details told Reuters on Wednesday.

The measures will be part of a new package for the steel sector due to be unveiled on October 7.

Stephane Sejourne, the Commission's executive vice president for industrial strategy, briefed steel associations and unions on Wednesday ahead of the announcement.

Henrik Adam, president of European steel association Eurofer and vice president of Tata Steel, told a press conference that Sejourne had reassured attendees their message had been understood, without divulging details. Steel imports into the EU are currently limited by safeguards, but these are set to expire in mid-2026 in accordance with World Trade Organization rules. Steel groups have been pressing for a halving of the current quotas and a tariff of 50 per cent excess volumes from 25 per cent now. They say quotas now are 26 per cent above original levels, while demand has declined.

The rate would put the EU in line with Canada and the United States, though the latter's tariffs apply from the very first ton.

The EU and Western allies are trying to contain excess capacity the OECD says will hit 721 million metric tons in 2027, notably due to subsidised Chinese factories.

The EU is also investigating market trends for potential aluminium safeguards as well as export duties on scrap metal.

The new steel import curb system could help secure a deal with the United States to replace 50 per cent US tariffs with a quota system, as outlined in the end-July US-EU deal.

The EU said it would work closely with Washington in a "metals alliance" to ring-fence their respective production from China.

EU trade chief Maros Sefcovic met US Trade Representative Jamieson Greer in Asia this month to revive the talks.