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Ministry of Steel | Ministry of Commerce and Industry
The European Parliament’s International Trade Committee has adopted a pivotal position on a proposed regulation to shield the Union market from the global steel production surplus. With the existing World Trade Organization (WTO) safeguards set to expire on June 30, 2026, after reaching their eight-year legal limit, MEPs voted 36 to 2 in favor of new measures to prevent a surge of low-priced imports. The committee emphasized that the EU industry currently faces severe job losses and unprofitable capacity utilization due to sustained global overcapacity, which hinders essential investment in decarbonization and future competitiveness.
Drastic Quota Reductions and Tariff Hikes The approved text introduces aggressive trade defense mechanisms to replace the outgoing safeguard regime:
Significant Volume Caps: The regulation envisages a major reduction in tariff-free import volumes, capping them at 18.3 million tonnes per year. This represents a 47% decrease compared to 2024 steel quotas.
High Out-of-Quota Duties: Imports exceeding the specified quota, as well as steel goods not covered by the quota, would be subject to a 50% customs duty.
Total Import Bans: The legislation explicitly bans all steel imports from Russia and Belarus, aligning steel with other high-priority goods already under restrictive import measures.
Enhanced Traceability: To prevent the bypassing of duties, the draft regulation strengthens traceability requirements, mandating that importers provide clearer evidence regarding the specific origin of their steel products.
Geopolitical Resilience and Next Steps The committee highlighted the strategic priority of steel for Europe’s resilience during times of geopolitical uncertainty. While the regulation tightens controls globally, it reaffirms continued tariff-free trade with Ukraine. The International Trade Committee has approved the commencement of negotiations with the Council, with the goal of finalizing the bill in the Spring of 2026.
What is the “WTO 8-year limit” mentioned in the background? Under the WTO Agreement on Safeguards, a safeguard measure may be applied for an initial period of four years and extended only if it is determined that the measure continues to be necessary. However, the total duration of a safeguard measure, including the initial period and any extensions, is strictly capped at eight years. Because the EU’s current steel safeguards began in 2018, they must legally expire by mid-2026, necessitating this new standalone EU regulation to maintain market protection.
Policy Relevance
The EU’s decision to nearly halve its tariff-free quotas creates a high-stakes environment for Indian steel exporters.
Intense Quota Competition: A 47% reduction in tariff-free volumes means Indian exporters will face a much narrower window to ship goods before the 50% “out-of-quota” duty triggers, potentially leading to a “front-loading” of exports at the start of each year.
Origin and Traceability Burden: The strengthened traceability requirements mean Indian mills must provide exhaustive documentation to prove their steel is not processed from Russian or Belarusian raw materials, increasing compliance costs.
Market Diversification: As the EU market becomes more restrictive, Indian policy stakeholders may need to fast-track bilateral trade negotiations with alternative regions or further incentivize domestic consumption through the PLI 2.0 scheme for specialty steel.
Relevant Question for Policy Stakeholders: In light of the 47% quota reduction, how can the Ministry of Steel support Indian exporters in diversifying their value-added steel portfolio to ensure higher margins within the smaller allowed volumes?
Follow the full news here: EU Sets New Measures to Protect EU Steel Market from Global Overcapacity