New EU steel trade instrument welcomed by German steel association

Germany's steel association Wirtschaftsvereinigung Stahl has welcomed the entry into force of the European Union's new steel trade instrument, describing it as an important step toward protecting the European steel industry from growing global overcapacity. At the same time, the association urged the European Commission to close remaining loopholes to ensure the mechanism achieves its full effect.

Industry sees stronger protection

The new trade instrument replaces the expired EU steel safeguard measures with a revised tariff-rate quota (TRQ) system. Country- and product-specific quotas allow tariff-free imports up to a defined level, after which a 50% duty applies. Unlike the previous safeguard system, the quotas are designed to adjust to changing market conditions.

"With the new steel trade instrument, there is now an effective response to the massive import pressure on the EU market, which had pushed the steel industry to the limits of its resilience," said Kerstin Maria Rippel, managing director of Wirtschaftsvereinigung Stahl. "The instrument gives the industry renewed confidence and sends an important signal for Germany and Europe's industrial base."

According to the association, the new mechanism is essential to prevent further market distortions that could undermine investment, employment and the transition to climate-neutral steel production.

Association calls for closing loopholes

While welcoming the new framework, Wirtschaftsvereinigung Stahl said further improvements are needed. The association called on the European Commission to extend the scope of the instrument to all steel products as well as steel-intensive downstream products to prevent circumvention.

It also warned that unused import quotas should not accumulate and later be released onto the European market in larger volumes.

"We are grateful that policymakers in Berlin and Brussels responded to the industry's concerns and introduced an effective and balanced instrument before the previous safeguards expired," Rippel said. She added that the measure protects steel producers while also taking into account the interests of steel-consuming industries.

Melted-and-poured rule remains key priority

A central demand of the association is the introduction of mandatory "melted and poured" documentation, which would determine a steel product's origin based on where it was actually melted and cast rather than where subsequent processing took place.

"The protective framework is now in place. The European Commission must now ensure that it cannot be circumvented," Rippel said. "It is essential that tariff-rate quotas are allocated to the actual country where the steel was produced."

According to Wirtschaftsvereinigung Stahl, a robust melted-and-poured requirement will also be important for future industrial policy initiatives, including the proposed Industrial Accelerator Act (IAA) and the further development of the EU's Carbon Border Adjustment Mechanism (CBAM).

"The EU must ensure that measures designed to strengthen industry actually benefit industrial value creation, investment and jobs within the European Union," Rippel concluded.

Source and Photo: WV Stahl