EU steelmakers hope for easing of global trade tensions

European steelmakers are hopeful that global trade tensions might ease after the United Kingdom became the first nation to negotiate a trade deal with the United States. 

The US will remove its 25% Section 232 tariff on UK-origin steel imports as part of an agreement revealed on May 8. Furthermore, it will reduce the tariff on automotive products to 10% for 100,000 vehicle imports, after which a 27.5% tariff will be levied. There remains little detail about the new terms, or the date of their implementation, however. 

• This article first appeared in MEPS International's European Steel Review. The monthly Review features steel prices, indices, commentaries and forecasts covering Belgium, France, Germany, Italy, Spain and the United Kingdom. Contact MEPS for details of how to subscribe.

On May 12, a 90-day reduction of import tariffs between the US and China provided further hope of a de-escalation of trade restrictions. The agreement will see the US cut its tariff rate on various Chinese goods (excluding steel) from 145% to 30% and China cut its rate from 125% to 10%.  

US trade deficit 

MEPS respondents in the EU are not optimistic that the European Commission will quickly negotiate a UK-style agreement to cut US import tariffs in the near term. The UK accounted for just 240,395 tonnes of the US’s 26.2 million tonnes of steel imports in 2024, while 3.89m tonnes of EU-origin material was imported into the US. Eurofer data shows that EU steel exports to the US resulted in a trade surplus of around 2.6m tonnes. 

Although negotiations are ongoing, plans are being made for an unsuccessful outcome to talks between the EU and US. The European Commission has launched a public consultation on a list of US-origin steel imports that could be subject to EU countermeasures. It is also consulting on possible restrictions on EU exports of steel scrap to the US. 

EU steel producers will be keen to maintain access to the US market. MEPS respondents report a further slowdown in demand, across Europe, this month. Drawing quality wire rod was the only product monitored by MEPS not to register an average price decline as prices edged down. 

Central to the UK’s steel trade deal with the US is an agreement over the two nations’ approach to trade defence. White House documents state that the US “recognises the economic security measures taken by the UK to combat global steel excess capacity” adding that the deal creates a “new trading union” for steel and aluminium.  

Proposed UK quota revisions 

On May 13, the UK’s Trade Remedies Authority (TRA) revealed proposed updates to the nation’s import safeguards measures. 

The main focus of the TRA’s proposed measures is to reduce the dominance of individual nations in certain quotas. Consequently, it proposes a 40% cap on individual countries’ use of the quotas for Category 4 (metallic coated sheet), 7 (non-alloy and other alloy quarto plates), and 13 (rebar). 

During 2024, Vietnamese-origin material accounted for 62% of goods imported under Category 4’s quota, with around 37% imported from South Korea. The utilisation rate of Category 7 was 52% last year, but South Korean-origin imports accounted for 80% of imports. The Category 13 quota was exhausted in each quarter, with Algerian-origin material accounting for 86% of imports. 

The TRA’s proposals would also remove the “carry-over” facility, which allows unused quotas to be made available in the following quarter. Furthermore, countries with a country-specific quota would no longer be given access to the residual quota in the final quarter and country-specific quotas for developing countries excepted from the measure would not be redistributed. Nonetheless, the 3% liberalisation of TRQs, from July 1, will still go ahead. 

If the plan is approved by the UK’s Secretary of State, the carry-over of unused quotas will end from July 1. However, the country-specific caps will be implemented from October 1. The TRA said that this would “allow steel importers time to adjust”. 

Despite the proposed revisions, the UK will remain a key target for exports redirected from the US if its sizeable steel market remains closed to producers in the EU and Asia.