EU steelmakers watch global trade developments with cautious optimism

European steel producers are closely monitoring recent global trade developments that could influence access to key export markets, particularly the United States. According to analysis published in MEPS International’s European Steel Review, industry stakeholders are cautiously hopeful that recent agreements signal a potential easing of trade tensions, though uncertainty remains.

One key development is the recent trade agreement between the United Kingdom and the United States, announced on May 8. Under the deal, the U.S. will lift the 25% Section 232 tariff on UK-origin steel imports. In addition, a new tariff structure on automotive products will allow for 100,000 vehicles to be imported from the UK at a reduced 10% duty, with a 27.5% rate applying thereafter. Implementation details and timelines are yet to be clarified.

While the agreement represents a significant milestone, MEPS notes that EU steelmakers remain doubtful about a similar deal being reached with the European Commission in the near future. In 2024, UK steel accounted for 240,395 tonnes of U.S. imports, compared to 3.89 million tonnes from EU sources. Despite this disparity, the European Union’s steel exports to the U.S. still delivered a trade surplus of approximately 2.6 million tonnes, according to data from Eurofer.

Meanwhile, developments in U.S.-China trade relations have also attracted attention. On May 12, a temporary 90-day agreement was reached to reduce tariffs on a range of goods—excluding steel. The U.S. has agreed to cut its rates from 145% to 30% on select Chinese imports, while China will reduce tariffs from 125% to 10%.

Amid these developments, the European Commission has launched a public consultation on potential countermeasures, including a list of U.S.-origin steel products that could face retaliatory tariffs. It is also reviewing the possibility of limiting steel scrap exports to the U.S., reflecting concerns about prolonged trade barriers.

MEPS respondents across Europe report ongoing market pressures, with most steel products seeing price declines in May. Drawing quality wire rod was the only exception, maintaining stable pricing amid otherwise weakening demand.

The UK’s agreement with the U.S. also includes a shared commitment to addressing global steel overcapacity, a factor cited by the U.S. administration in framing the deal as a foundation for a “new trading union” on steel and aluminium.

In a related move, the UK’s Trade Remedies Authority (TRA) announced proposed changes to its import safeguards on May 13. Aimed at reducing the dominance of individual exporting countries, the new measures propose a 40% cap on national usage of certain quotas—including metallic coated sheet (Category 4), quarto plates (Category 7), and rebar (Category 13).

Vietnam and South Korea were the largest users of Category 4 and 7 quotas in 2024, while Algerian-origin rebar dominated Category 13. The TRA also proposes removing the “carry-over” mechanism that currently allows unused quarterly quotas to roll over, with implementation timelines beginning July 1 for some changes and October 1 for quota caps. A 3% liberalisation of tariff rate quotas (TRQs) will proceed as scheduled from July.

If the U.S. market remains largely closed to EU and Asian producers, the UK may increasingly become a target for redirected exports. Despite the proposed revisions, MEPS analysis suggests the UK could retain its strategic importance in global steel trade flows in the short term.#

Source: MEPS, Photo: Fotolia