Posted on 09 June 2020

 

Source: Bloomberg

The European Union steel industry lashed out at the EU’s trade authority for failing to slash import quotas in a planned revamp of them, saying producers in the bloc risk going bust.

The European Steel Association and chief executive officers of EU-based manufacturers took aim at the bloc’s proposed changes to the administration of import controls introduced two years ago. The curbs, known as “safeguard” measures, are meant to prevent a controversial 25% U.S. levy on foreign steel from diverting global shipments to the EU market and flooding it.

EU to Revamp Steel-Import Controls as Virus-Hit Economy Recovers

The European Commission, the EU’s executive arm, on May 29 announced an overhaul of the quotas to take account of the coronavirus-induced economic slump while stopping short of quota cuts demanded by the bloc’s producers. The changes, due to take effect on July 1, are meant to prevent market distortions as the EU economy recovers from the Covid-19 pandemic.

“The import quotas should be reduced considerably,” the industry association and CEOs said in a joint statement released on Monday in Brussels. “The European steel industry’s survival is at further, serious risk because the commission’s steel safeguard review proposal does not consider the sharp collapse in demand following the Covid pandemic.”

Citing continued or restored steel production and stockpiling in countries such as China, Indonesia, India and Russia, the statement evoked the possibility of EU imports suddenly increasing their roughly 20% share of the European market.

“The current proposal could massively boost the market share of imports while a huge part of EU production capacity sits idle,” the statement said. 

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