EU seeks US trade concessions by doubling steel tariffs

But China was quick to hit back and labeled the EU Commission's steel tariffs a 'protectionism step.'

SEATTLE (Scrap Monster):The EU Commission announced Tuesday it would double its duties to 50% for steel imports above a a tariff-free quota — with the quota itself planned to be cut by 47% to 18.3 million tons a year. The proposal is subject to approval by the EU's 27 member states and the European Parliament

The decision comes under efforts to address global overproduction and a slump in European output that has left a third of the bloc's steel production capacity idle.

But questions are already being raised if the bloc that advertises itself as a paragon of free trade has taken a leaf from US President Donald Trump's playbook after Brussels matched 50% steel tariffs imposed by Washington earlier this year. 

Or is it merely trying to save its domestic steel industry from overcapacity and seek a better deal with the US on European steel exports? 

EU's steel levy a protectionist measure? 

The woes of the EU's steel industry have largely been blamed on China's dumping of excess supply at cheaper rates on the European market. 

But China was quick to hit back and labeled the EU Commission's steel tariffs a 'protectionism step.' 

In a WeChat statement cited by Chinese daily newspaper Global Times, the China Chamber of Commerce in the EU (CCCEU) said: 'Although China’s steel exports to the EU account for only a modest share of its total global exports, this move nevertheless signals a worrying rise in trade protectionism within the EU market.'

The statement noted further that such a trend 'runs counter to the EU’s long-standing commitment to open, rules-based, and predictable trade.'

But the EU says higher tariffs only target excess volumes and still offer a steel quota not subject to higher levies. 

The European Steel Association (EUROFER) welcomed the new policy and described it as a 'lifeline' for the bloc's steel industry which has shed nearly 100,000 jobs within the past 15 years. 

In a statement, EUROFER said the Commission's decision was in line with trade rules set by the World Trade Organization (WTO).

The industry group argues  'unlike the US tariffs that impose 50% duties on all steel imports,' the EU would introduce a 'Tariff Rate Quota system, allowing a fair volume of imports to enter Europe free of tariffs.' 

This quota of 18.3 million tons of tariff-free steel imports, EUROFER said, reflected 2013 market conditions 'before the first wave of Chinese steel flooding,' and was almost as high as 'the combined steel production of France, Belgium, and Luxembourg.' 

'Only unsustainable imports above quota levels will be subject to a 50% tariff,' the industry group added in the statement. 

 Courtesy: www.dw.com