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EU steel safeguard measures ‘not in Europe’s interest

A number of industry groups representing downstream users of steel in Europe — including the automotive, construction equipment, agriculture machinery, home appliance and technology industry sectors — have written to the European Commissioner for Trade, Cecilia Malmstrom, to express concerns over the safeguard investigation into steel products, launched in March, the groups said Tuesday.
The European Commission launched the safeguard investigation in response to US import tariffs on steel and aluminum, with the aim of preventing a surge of steel imports into the EU.
“The potential result of this procedure would be the introduction of import tariffs or quotas,” the groups said.
“European steel is and will remain an integral part of our supply chains,” the letter said. “Nevertheless, the application of ever-greater layers of protection for it will ultimately only have a negative impact on downstream users of these products. Therefore, we are convinced that the imposition of safeguard measures is not in Europe’s interest.”
According to auto manufacturers’ association ACEA, one of the signatories to the letter, “trade data for many of the product categories under investigation do not show evidence of a sudden and sharp increase in imports, the signatories to the letter argue.”
ACEA added: “What is more, European steel producers are in good health, reporting high profits in 2017 and similar outlooks for 2018. Capacity utilisation in the EU steel sector is also currently high, with some producers even experiencing a shortage of capacity leading to increased prices and longer lead times.”
Policy makers “should also be aware that should steel imports increase in the coming months, then trade deflection could be just one of many different factors influencing this trend,” the statement said, adding that an increased demand for steel in manufacturing, metalworking and construction was forecast for 2018 and beyond.
“It is vital for the industries concerned to have the ability to procure raw materials and semi-finished products of good quality at competitive prices,” ACEA said. Many steel products are already subject to antidumping and antisubsidy measures, the group said, citing the letter to the effect that “the imposition of further measures would put downstream users under yet more pressure in their fight for global competitiveness.”
In addition to ACEA, the letter was signed by APPLiA, the European home appliance industry association; CECE, the Committee for European Construction Equipment; CEMA, the the European association representing the agricultural machinery industry; CLEPA, the European Association of Automotive Suppliers; Metal Packaging Europe; Orgalime, which speaks for 45 trade federations representing the mechanical, electrical, electronic, metalworking and metal articles industries of 23 European countries; and T&D Europe, the European Association of the Electricity Transmission & Distribution Equipment and Services Industry.
The US Section 242 tariffs, which imposed import duty of 25% on steel and 10% on aluminum, have already led to a spike in steel imports into the EU, steel industry group Eurofer said earlier this month.
After seeing imports virtually come to a halt in the second half of 2017, the region saw an 8% uptick in imports in the first quarter of 2018, Eurofer President Geert Van Poelvoorde told reporters on June 8.
He said the spike was directly tied to the US Section 232 steel tariffs, arguing that while the tariffs only took effect on June 1, the threat had been hanging over the global market for months beforehand.
Eurofer has recommended to the EC that its response to the Section 232 actions should include a 25% import tariff, on top of by-country import quotas.
Source: Platts
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