The European Commission has published the allocation of steel import quotas for specific countries just one day before new protective measures to regulate steel trade come into force, giving traders some time to adapt to a more complex import system.
The Implementation Regulation confirms how annual tariff quotas (TRQs) will be distributed among supplier countries across 26 categories of steel products. The new steel regulations replace the previous EU steel protection system and reduce EU importers' access to duty-free steel imports by 47%, to 18.3 million tons. Import volumes exceeding the quota will be subject to a 50% duty, which is twice the 25% tariff applied under the outgoing measures.
"With the steel production ordinance coming into force tomorrow, many importers already have materials in ports or on the water awaiting customs clearance under the new quotas," said John Carruthers-Green, steel market analyst at MEPS International.
"Due to the short notice, there is very little time left to adapt, and some businesses may be caught off guard by the scale of changes in both quota volumes and access to quotas, which could potentially lead to the introduction of new harsh tariffs," he added.
The final details of the EU's new steel regulation have been released just days after the UK announced its new tariff quotas. These include a 51% reduction in tariff rates and an increase in tariffs exceeding quotas from 25% to 50%.
New quota architecture
In addition to defining the long-awaited quotas for specific countries, the European Commission's Steel Production Regulation, which comes into force, also introduces a new quota structure that changes as exporters gain access to duty-free imports.
The system still has quotas for specific countries and residual quotas for "other countries". However, suppliers from some third countries with current or future free trade agreements (FTAs) can now compete for access to a separate common quota once their own country-specific quota is exhausted. This new mechanism does not apply to every country in the free trade agreement or to every product or category of goods.
"The key change is that some free trade agreement partners are actually getting a second route to duty-free access," said Carruthers-Green.
"Understanding the quota volumes alone is no longer enough. Importers now need to understand which ways of obtaining quotas are available for each exporting country, because