The European Commission is behind schedule in its work to propose a new safeguard measure for steel. The European Commissioner for Industrial Prosperity, Stéphane Séjourné, promised a proposal by the end of September, but his colleague in charge of Trade, Maroš Šefčovič, mentioned mid-October in an interview with the media outlet Euractiv.
According to two sources, the work has been delayed because the Commission is still hesitating about the type of tool it will use to replace the current backup, which expires in June 2026. What’s more, the open consultation on this legislation ended just one month ago, on 18 August. The Commission received 143 responses, many of them at the last minute, and must now analyse them.
Among the options available, the Commission is considering invoking national security grounds, following the example of the United States with its ‘Section 232’ tariffs. This would enable it to impose restrictions on steel imports more definitively than the current safeguard, which can only last for eight years.
The rules of the World Trade Organization (WTO) provide for the possibility of invoking reasons of national security in exceptional circumstances (Article XXI of the GATT agreement). In 2022, however, a WTO tribunal ruled that Washington’s justification for invoking this GATT article for its 232 tariffs on steel and aluminium was invalid. This ruling has little effect, as the United States continues to increase its tariffs on the same basis.
For this reason, the Commission would prefer to use another option, according to one source, which is to raise the basic ‘MFN’ rates on steel that apply to all its trading partners (outside the free trade agreement). This also requires a WTO approach and negotiations with key trading partners, first and foremost China.
Cooperation with the United States. In his interview with Euractiv, Maroš Šefčovič suggests that the EU’s future trade measure on steel should reflect the shared overcapacity challenges of the US and the EU.
At present, Washington is continuing to impose a 50% tariff on steel and several hundred by-products from the EU. According to several sources, discussions on tariff quotas allowing a quota of European steel to enter at reduced rates have barely got off the ground. (Original version in French by Léa Marchal)