EU quota cuts pose a greater threat to British steel industry than US tariffs

SEATTLE (Scrap Monster): The European Union is preparing to cut steel import quotas by almost half, posing a serious threat to British steelmakers. The draft decision, which the European Commission will officially present next week, provides for a 50% tariff on products exceeding the established limit, according to Politico.

For Britain, which exports about 1.9 million tons of steel to the EU per year — almost half of its total production — this means the risk of losing its largest market. By comparison, only 200,000 tons are supplied to the US.

Similar concerns were confirmed by British Steel’s commercial director, Lisa Coulson, who said that a sharp reduction in quotas could effectively close access to the EU market at a time when producers are already facing 25% tariffs in the US.

The British industry is already calling the situation panic-stricken. Representatives of metallurgical companies believe that the loss of the EU market could be one of the biggest disasters for the sector, which is already suffering from bankruptcies and government intervention in the work of British Steel.

European Commissioner for Trade stressed that Brussels plans to adopt strong protective measures as early as October. However, the document still has to be approved by the EU Council and the European Parliament, where it may be watered down.

London is closely monitoring the situation, which risks undermining efforts to restore relations between the EU and Britain. The UK government has said it plans to invest £2.5 billion in rebuilding the steel industry and is considering additional tools to protect domestic producers.

It should be recalled that the EU and the UK may conclude an agreement that will exempt British businesses from the carbon border adjustment mechanism (CBAM). The government is seeking a temporary exemption from the European tax until the parties agree on their schemes. 

Courtesy: www.gmk.center