5 June 2023 – The European Commission has decided that the EU Safeguard measure must remain in place until at least 2024. Find out the most important background information, the justification and what changes there are for stainless steel imports in a talk with Thorsten Gerber.
Video: EU Safeguard Review 2023, Talk with Thorsten Gerber
(with subtitles)
EU Safeguard measure remains in place
According to a statement issued last Friday (2 June 2023), EU member states and the European Commission have decided that the EU Safeguard measure on certain steel products must remain in place until at least 2024.
Two justifications in particular stand out, according to an analysis of documents submitted to the World Trade Organisation (WTO).
Section 232 and the state of EU steel producers
The main justification is the still active Section 232 tariffs of the United States, which the US administration under Joe Biden had most recently clearly signalled it did not want to abolish.
The EC’s second main justification for maintaining the measure is the cooling of the economic situation in the steel producing industry. For example, unused tariff quotas, profitability of producers and the decline in consumption with continued imports.
First discrepancies in the Safeguard rationale
A few discrepancies in the justification stand out, however, which could potentially lead to controversy and are perhaps once again based on a calculation error or different figures on the part of the steel producers and the European Commission.
20 million more tonnes per year?
Officially, the EU has had a crude steel production capacity of about 203 million tonnes per year for several years. If one now calculates with the production figures postulated in the explanatory memorandum and the stated capacity utilisation, the EU would have gained more than 20 million tonnes per year in new production capacity in the last two years.
A capacity increase of more than 10%?
If true, this could put the EU under pressure to explain itself, as it is one of the main critics of growing overcapacities in crude steel production and global overcapacities are often cited as a co-justification for the Safeguard measure. A capacity increase of more than 10% would probably be rather inconvenient for the steel producers and the EC at the negotiating level.
EU steel producing countries prevail once again
Even though the EC announced in the opening of the Safeguard Review that this was at its own behest, several EU states had pushed for a review of the Safeguard measure in the run-up to the review and demanded its repeal, but were apparently unable to prevail against the large EU steel producing states.
For further details and background information, please view our talk with Thorsten Gerber.
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