EU Plans To Slash Steel Import Quotas, Double Tariffs To 50%
🚨BREAKING: EU Steel Crackdown – Brussels Plans To Cut Import Quotas By Half And Double Tariffs To 50% To Combat Chinese Overcapacity
EXCLUSIVE: New Package To Be Unveiled October 7 As European Commission Aligns With US And Canadian Tariff Rates In “Metals Alliance” Strategy
BRUSSELS, October 1, 2025 — The European Commission is preparing to dramatically tighten restrictions on steel imports by cutting quotas by nearly half and doubling tariffs on excess volumes to 50%, according to sources briefed on the details who spoke to Reuters on Wednesday. The aggressive new measures, set to be officially unveiled on October 7, would align the European Union’s steel protection policies with tariff rates already imposed by the United States and Canada as Western allies coordinate efforts to combat massive overcapacity created by subsidized Chinese steel factories.
⚡ THE PROPOSED MEASURES – Doubling Down On Protection
Stephane Sejourne, the European Commission’s executive vice president for industrial strategy, briefed steel associations and unions on Wednesday ahead of next week’s public announcement. While he did not divulge specific details during the briefing, sources familiar with the plans revealed the scope of the proposed changes:
Steel Import Quota Cuts: The Commission will propose slashing current steel import quotas by approximately 50%. This represents a dramatic escalation from the 15% quota tightening that took effect on April 1, 2025.
Tariff Increase To 50%: Duties on steel volumes exceeding the new, lower quotas would be raised from the current 25% to 50% – matching tariff rates imposed by both the United States and Canada.
Timeline: The new package for the steel sector will be officially presented on October 7, 2025. Current steel safeguards are set to expire on June 30, 2026.
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,” though he declined to provide specifics.
💥 WHY THE CRACKDOWN – The Chinese Overcapacity Problem
The European Union and Western allies are responding to what they view as an existential threat to their domestic steel industries: massive overcapacity driven primarily by subsidized Chinese production.
The Numbers Are Staggering: According to the Organisation for Economic Co-operation and Development (OECD), global steel overcapacity is projected to reach 721 million metric tons by 2027 – driven notably by subsidized Chinese factories that can produce far more steel than global markets can absorb.
Current Quota Problems: European steel groups have been pressing for these dramatic changes, arguing that current quotas are 26% above original levels while demand has actually declined. This mismatch has left European producers struggling to compete with cheaper imports flooding the market.
Market Displacement: The combination of declining demand and excessive import quotas has caused EU steel producers to lose significant market share, threatening employment and investment in the sector.
🎯 ALIGNMENT WITH US AND CANADA – The “Metals Alliance”
The proposed 50% tariff rate would put the EU in line with Canada and align more closely with the United States, though there’s a crucial difference:
EU Approach: The 50% tariff would apply only to volumes ABOVE the quota threshold. Steel imports within quota limits would face lower or no additional duties.
US Approach: American tariffs of 50% apply from the very first ton of steel imported, with no quota system softening the impact.
This difference reflects the EU’s effort to balance protectionism with its World Trade Organization (WTO) obligations and its own rhetoric about open markets and rules-based trade.
The “Metals Alliance” Strategy: Following a general trade agreement reached with the Trump administration in late July 2025, the EU committed to working closely with Washington in what officials call a “metals alliance” designed to ring-fence their respective steel production from Chinese competition.
EU Trade Commissioner Maros Sefcovic met with US Trade Representative Jamieson Greer in Asia earlier this month to reignite negotiations on the metals partnership.
🔥 THE NEGOTIATING LEVERAGE PLAY
The new steel import system could serve a dual purpose beyond simply protecting European producers:
Bargaining Chip With Washington: European sources previously told Reuters that the new safeguards would serve as a “jumping-off point for detailed negotiations with Washington.”
The Target: Replacing the 50% US export tariffs that European steelmakers still face with a quota system that would allow predictable access to the American market.
The Trade-Off: The EU’s tougher stance on Chinese steel imports could provide credibility in negotiations with Washington, demonstrating that Europe is serious about addressing overcapacity and not simply serving as a dumping ground for diverted Chinese steel.
This strategy recognizes a political reality: The Trump administration has been skeptical of European commitment to confronting Chinese economic practices and may be more willing to negotiate if the EU demonstrates concrete action.
⚔️ BEYOND STEEL – Aluminum And Scrap Metal
The Commission’s protectionist moves extend beyond steel:
Aluminum Investigation: The Commission is currently investigating market trends for potential aluminum safeguards, suggesting similar protective measures could be implemented for that sector if the analysis justifies intervention.
Scrap Metal Export Duties: The EU is also examining the possibility of implementing export duties on scrap metal – a measure that would keep more raw materials within Europe for domestic steel recycling and production.
These additional investigations signal a comprehensive approach to protecting European metals industries rather than a narrowly focused steel-only strategy.
💔 THE INDUSTRY PRESSURE CAMPAIGN
European steel producers have been aggressively lobbying for these measures, arguing their survival depends on more aggressive protection:
Eurofer’s Position: The European steel association has been pressing specifically for a halving of current quotas and a 50% tariff on excess volumes – exactly what the Commission is now proposing.
The Arguments:
- Current quotas are too generous relative to actual market demand
- Subsidized imports are destroying European market share
- Without protection, European steel production capacity will continue shrinking
- Green steel investments require breathing room from cheap imports
Employment And Investment Concerns: Steel industry representatives argue that continued import pressure threatens not just profitability but the viability of facilities, jobs, and the ability to invest in cleaner production technologies.
🌍 THE WTO CONSTRAINT
The EU faces a timing challenge due to World Trade Organization rules:
Steel imports into the EU are currently limited by safeguards that are set to expire in mid-2026 in accordance with WTO regulations. The organization generally permits safeguard measures for limited periods to give industries time to adjust, but not indefinitely.
The new measures being proposed would need to comply with WTO requirements while still providing meaningful protection. The quota system approach may be designed partly to satisfy WTO rules that favor less restrictive trade measures over blanket bans or prohibitive tariffs.
The expiration of current safeguards in June 2026 creates urgency for the Commission to have a replacement system ready, hence the October 7 announcement with implementation expected well before the deadline.
🚀 MARKET REACTION – SSAB Stock Jumps 10%
Financial markets responded enthusiastically to news of the proposed measures:
Swedish steelmaker SSAB saw its stock price jump 10% on Wednesday after Reuters reported the Commission’s plans. The market reaction reflects investor expectations that tighter import restrictions and higher tariffs on foreign steel will improve pricing power and profitability for European producers.
Other European steel stocks also saw gains as investors priced in the likelihood of reduced foreign competition and potentially higher steel prices in the European market.
The strong market reaction suggests investors view the proposed measures as credible and likely to be implemented, rather than merely symbolic gestures.
⚡ THE CHINESE RESPONSE
While China has not yet officially responded to the EU’s planned measures, Beijing has historically reacted strongly to what it views as protectionist trade barriers targeting Chinese exports.
Likely Chinese arguments:
- The measures violate WTO principles and free trade commitments
- Chinese steel production responds to legitimate market demand
- European industries are simply uncompetitive and using trade barriers as a crutch
- The measures could trigger retaliatory actions against European exports to China
The EU will need to carefully craft its implementation to withstand potential WTO challenges from China while still achieving the desired protective effect.
🤔 THE BROADER CONTEXT – Industrial Strategy
The steel measures fit within a broader European industrial strategy that has become increasingly focused on “strategic autonomy” and reducing dependence on China:
Stéphane Séjourné’s Vision: The Commission’s executive vice president for industrial strategy has made clear that “Europe must be a global steel player, not a playground” – signaling a more assertive approach to protecting European industrial capacity.
The Green Transition: European officials argue that protecting the steel industry is essential for the green transition, as Europe needs domestic steel production capacity to manufacture wind turbines, electric vehicles, solar panel infrastructure, and other clean energy technologies.
Geopolitical Dimensions: Russia’s invasion of Ukraine and growing tensions with China have reinforced European desires to maintain industrial self-sufficiency in strategic sectors like steel.
💥 WHAT HAPPENS NEXT
October 7: Official unveiling of the steel package by the European Commission
Following Weeks: Member state consultations and potential modifications to the proposal
Early 2026: Expected implementation of new measures, well ahead of the June 30, 2026 expiration of current safeguards
Ongoing: Negotiations with the United States on metals alliance and potential quota arrangements to replace US export tariffs
The October 7 announcement will reveal the full details of the package, including specific quota numbers, tariff schedules, country-by-country allocations, and implementation timelines.
DEVELOPING STORY — Full details to be revealed October 7…
