The European Commission voted to adopt definitive measures on imported steel products from all non-European Economic Area (EEA) countries following the safeguard proceeding launched in March 2018. However, certain countries in which the Commission has signed an Economic Partnership Agreement will be exempted from the scope of the measures. This list includes countries such as Botswana, Cameroon, Fiji, Ghana, Ivory Coast, Lesotho, Mozambique, Namibia, South Africa, and Swaziland.

The measures will consist of a country-specific quota based on average imports from 2015-2017 for 26 steel product categories to counter “trade diversion” due to the U.S. Section 232 tariffs on steel and aluminum products. Imports above the tariff-rate quota will be subject to a 25% ad valorem duty. The safeguard measures go into effect at the beginning of February 2019 and will remain in place until July 16, 2021.

The 26 steel categories consist of the following steel products:

  1. Non-Alloy and Other Alloy Hot-Rolled Sheets and Strips;
  2. Non-Alloy and Other Alloy Cold-Rolled Sheets;
  3. Electrical Sheets (other than Grain Oriented Electrical Steels, or GOES);
  4. Metallic Coated Sheets;
  5. Organic Coated Sheets;
  6. Tin Mill Products;
  7. Non-Alloy and Other Alloy Quarto Plates;
  8. Stainless Hot-Rolled Sheets and Strips;
  9. Stainless Cold-Rolled Sheets and Strips;
  10. Stainless Hot Rolled Quarto Plates
  11. Non-Alloy and Other Alloy Merchant Bars and Light Sections;
  12. Rebars;
  13. Stainless Bars and Light Sections;
  14. Stainless Wire Rod;
  15. Non-Alloy and Other Alloy Wire Rod;
  16. Angles, Shapes, and Sections of Iron or Non-Alloy Steel;
  17. Sheet Piling;
  18. Railway Material;
  19. Gas Pipes;
  20. Hollow Sections;
  21. Seamless Stainless Tubes and Pipes;
  22. Other Seamless Tubes;
  23. Large Welded Tubes;
  24. Other Welded Pipes;
  25. Non-Alloy and Other Alloy Cold Finished Bars; and
  26. Non-Alloy Wire.

A comprehensive list of the steel categories subject to the tariff-rate quota can be found in Annex II of the EU’s notification to the WTO to impose safeguard measures.

There is currently no company exclusion process for the EU safeguard measures.

The Commission circulated the notification to impose safeguard measures to all WTO members. According to the notification, countries with a “significant supply interest” will get a specific tariff-rate quota, while all other countries will import under a “residual quota”. Any remaining balance of the quota for each product category will become available to all exporters in the last quarter of the period.

 

On March 26, 2018, the European Commission launched a safeguard proceeding against imports into the EU of a wide range of steel products in 26 different categories. Per the Notice of Initiation, the proceeding is intended to counter the threat of trade diversion by exporting producers from various countries now subject to the Section 232 national security tariff of 25 percent on imports of steel into the U.S.

Since March 2016, the EU has maintained a surveillance system for steel imports. The system has provided recent evidence imports of certain steel products are increasing. This development may be further exacerbated as third-country producers are now likely to redirect to other markets, and especially the EU, an amount of their exports originally destined for the U.S.

In accordance with the rules of the WTO Agreement on Safeguards, the EU proceeding covers the products concerned from all origins. If upon conclusion of the proceeding in 9 months it is deemed necessary to protect EU steel producers from a surge in imports, the EU may impose import tariffs or quotas. In the meantime, the EU also has the option to impose provisional measures if EU steel producers are deemed to merit immediate protection from a surge in imports.

According to the Notice, in order to obtain the information needed for its investigation, the Commission will “send questionnaires to the known producers of the like or directly competing products and to any known associations of producers, in the Union. The completed questionnaires must reach the Commission within 21 days from the date on which they are sent.”

Also, “All interested parties including exporting producers, importers and users of the products concerned and their associations are invited to make known their views in writing, submit information and to provide supporting evidence. Representations in a free format should be submitted within 21 days of the date of publication of this Notice in the Official Journal of the European Union [April 16, 2018]. Interested parties may make themselves known by contacting the Commission, preferably by email, immediately but no later than 15 days after the publication of this Notice in the Official Journal of the European Union, and request a questionnaire [April 10, 2018]. The completed questionnaire should be submitted within 21 days from the date on which they are sent.”