Seventeen member states of the European Union approved the extension of the region’s safeguard measures on steel imports for three years and an annual tariff rate quota increase of 3pc last week.
Two members abstained from voting while eight expressed opposition to the extension with a negative vote. The voting results went to the EU Commission for a final decision and an official announcement is due before the end of the month as the safeguards are due to expire on Jun 30.
Proposals are normally approved when the vote passes a threshold of 65pc or more of the EU population’s approval results from member states. The larger member states representing over 80pc of the EU population voted in favor, thereby, surpassing that milestone.
Steel industry associations were cautious about the approval. Eurometal indicated it was concerned over the shortage in steel supplies to consumers while Eurofer articulated the various risks and need for continued protection for the steel industry in the EU.
Eurofer spokesperson Charles de Lusignan noted in a statement to Davis Index that the organization would not comment on the results until the EU Commission made an official statement on the proceedings, voting results, and the implications of the final safeguard actions that will be implemented after Jul 1.
Investigations on the EU safeguards began in February and since then various groups have petitioned against the continuation of this practice citing the excessively high steel materials costs, a different environment in 2021 from when safeguards were instituted, limited materials from domestic mills, and the need for import options.
Downstream steel consumers have articulated the risk to their businesses on reduced mill capacities, high prices that cannot be passed on to consumers, long lead times, and an inability to obtain materials for fabrication needs to their end consumers. Domestic mills claim the protections are necessary to ensure investments and the viability of the industry against unfair trading practices, especially, given the continuation of the US Section 232 tariffs that would redirect potentially market injurious import material to the EU.