6 October 2025 – When rumours about new tariffs emerge, we generally prefer to stick to established facts – and if necessary, put those facts into proper perspective based on what is being rumoured. So, based on the current chatter, let’s look at what could actually be coming. A preliminary conclusion: if things turn out as reported, it will become very expensive for the European Union.
- Steel Tariffs and Quotas: Is the EU Opening Pandora's Box?
- The EU Opens Pandora's Box with Steel Tariffs
- Basic rule: those who want tariffs must pay for them
- EU must expect countermeasures
- Negotiations with WTO members could take years
- Steel Tariffs and TRQs cannot be discriminatory
- "Melt and Pour" rule would massively interfere with trade agreements
- Short-term implementation by January 2026 virtually impossible
- Steel tariffs: others in the EU will foot the bill
Steel Tariffs and Quotas: Is the EU Opening Pandora’s Box?
As is well known, we do not usually engage in speculation about possible new European steel tariffs or quota regulations. And if we do address such topics, they are clearly marked as speculative. However, since Thursday of last week, rumours have been circulating across various media about a so-called “draft from the European Commission” proposing to raise current steel tariffs from 25% to 50% and to reduce safeguard tariff rate quotas by up to 50%. Therefore, we take a closer look at the facts behind these rumours.
The rumours appear to originate from an analytics company that normally operates in the energy sector: OPIS. According to its own statements, OPIS claims to have received a leaked draft from the European Commission regarding new permanent steel tariffs, quota reductions, and a “Melt and Pour” rule that would in future define the origin of a steel product. It is rather curious why a company specialised in petroleum pricing and market reporting should be given an EU regulatory draft on steel. Nothing is known about the actual status of the draft – whether it is months old or already outdated remains unclear.
We would like to draw attention to a comment on LinkedIn, which we would like to add here.
The EU Opens Pandora’s Box with Steel Tariffs
Steel imports into the European Union were originally duty-free-at 0.00%. With the EU Safeguard measure on certain steel products, however, the EU imposed a combination of tariff rate quotas and punitive duties on most imported steel from 2019 onwards. Such a safeguard measure, under WTO rules, expires after a maximum of eight years and cannot be reintroduced for another eight years.
It is, however, permitted for all WTO members to adjust their tariffs periodically – under certain conditions. The legal basis for this is Article XXVIII (Modification of Schedules) of the GATT Agreement of 1994, which sets out how members may modify their tariff commitments.
Basic rule: those who want tariffs must pay for them
In principle, if a member wants to adjust its tariffs, it must compensate other members for any resulting losses. If it fails to do so, other members are entitled to retaliate. The restrictions are even stricter in the case of tariff rate quotas: if the new quotas fall below previous import levels, compensation payments must be even higher. A possible “Melt and Pour” rule would likely commit the EU to further concessions towards its global trading partners.
EU must expect countermeasures
Overall, the potential measures concern steel imports worth up to €30 billion per year, for which the EU would have to compensate other WTO members depending on how the steel tariffs and TRQs are structured – including countries such as China. If it fails to compensate, it must expect retaliatory action that would burden other EU export sectors.
Negotiations with WTO members could take years
Before any tariff increases or permanent TRQs could be introduced, extensive negotiations with affected WTO members would be required. Such negotiations can be complex and drawn out, and have in past cases taken several years. Should the EU act unilaterally before concluding these talks, it would almost certainly face global retaliation, something that would hit the EU’s export-dependent economy hard.
Steel Tariffs and TRQs cannot be discriminatory
Furthermore, neither tariffs nor TRQs may be imposed selectively against specific WTO members. Such measures therefore apply to all, including the United States. One can easily imagine how the Trump administration in Washington would react to such a move. The much-celebrated EU-US trade agreement would then rest on very thin ice indeed. President Trump has repeatedly warned against imposing new tariffs on the US, thus the EU could quickly find itself facing 100% tariffs on steel, or even on all EU exports to the United States, for breaching the deal.
“Melt and Pour” rule would massively interfere with trade agreements
Should the Commission really wish to pursue this path, it faces further major hurdles. It first requires a mandate from the Member States to begin negotiations within the WTO. Moreover, since it intends to introduce a “Melt and Pour” rule, which would significantly affect product origin definitions, it must also negotiate with all countries currently holding a Free Trade Agreement (FTA) with the EU. Changes to rules of origin do not only affect external trade partners but are also relevant for the EU’s internal market. Thus, the European Parliament must be involved as well.
Short-term implementation by January 2026 virtually impossible
The introduction of new tariffs, lower tariff rate quotas and a Melt and Pour rule is therefore highly unlikely in the short term. The EU is more likely to face strong resistance from all its trade partners, both within the WTO and under its FTAs. The United States, in particular, would look upon such a move with displeasure and could respond with reciprocal tariffs or even terminate the EU-US tariff deal altogether. Before the current EU Safeguard measure expires in mid-2026, a follow-up measure thus appears highly improbable.
Steel tariffs: others in the EU will foot the bill
Ultimately, this will be an expensive undertaking for the EU, as it will either have to make concessions or accept that other European industries will suffer. Whether the Union can afford this form of “subsidy” through taxes (tariffs) and TRQs for an ageing and greed-driven industrial sector such as steel, at the expense of others, seems highly questionable. A quick internal agreement is unlikely, given the EU institutions’ usual pace. And as the example of CBAM clearly shows, anything the EU rushes through in haste has never turned out well.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
