The updated quotas will take effect on 1 July, with certain preferential conditions granted to partners covered by trade agreements with the EU.

On Tuesday, the EU assigned import quotas for steel to its trading partners as part of an effort to address the increasing surplus generated by foreign producers.

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This decision emerges amid growing friction between the EU and China, which is responsible for the bulk of the global steel surplus.

In an attempt to protect its market from worldwide excess capacity, EU lawmakers agreed last April to raise the current tariff-free steel quotas to 18.3 million tonnes annually and simultaneously double the tariffs on steel imports exceeding those quotas to 50 percent.

Close allies of the EU, including the UK, Switzerland, and Ukraine, have expressed concerns that their steel exports to the EU may be significantly impacted by these new provisions, prompting intense lobbying of the European Commission recently to secure preferential market access.

“We offer market stakeholders certainty by implementing clear and transparent rules for quota allocation while applying an equitable and objective methodology,” stated EU Trade Commissioner Maroš Šefčovič.

Protectionist action

This protectionist initiative occurs in the context of predicted global steel excess capacity growing to 721 million tonnes by 2027, according to the OECD, a volume that threatens employment across the EU’s entire steel industry.

Last year, the EU faced additional strain when the US imposed 50 percent tariffs on steel imports, redirecting the global surplus toward the European market.

“The US erected barriers around their market; steel was encountering those barriers and then flooding back into our market in larger quantities,” explained a senior EU official. “This prompted the implementation of a safeguard measure following an inquiry.”

The EU is also countering unfair trade practices broadly, with 80 other measures already enacted, including anti-dumping tariffs mainly aimed at inexpensive steel imports from China.

Under pressure from close allies seeking relaxed measures favorable to their interests, the Commission announced on Tuesday that half of the 18.3 million tonnes allowed annually will be dedicated to partners under free trade agreements with the bloc, such as India, Switzerland, and the UK.

Many nations with trade agreements with the EU will receive country-specific quotas proportional to the trade volumes recorded between 2022 and 2024.

Ukraine has been granted a special status to assist the country during its ongoing conflict and to maintain a defined export level to the EU.