Trump’s Steel Tariffs Have Forced the EU to Launch Quotas on Steel Imports

February 1, 2019, 11:41 AM UTC

One predictable effect of President Donald Trump’s imposition of wide-ranging steel tariffs is that there’s a glut of steel in the market that isn’t going into the U.S. A lot of cheap steel has been flooding into the European Union, so the EU is now acting to stem the flow.

The EU started looking at its options in March last year and adopted provisional safeguards four months later. On Saturday, it will impose quotas in order to protect steel producers in Germany, Italy, Spain, Poland, France, Slovakia and Slovenia, who are less than keen on having foreign steel dumped on their turf at low prices.

In effect, Trump’s tariffs has led the EU to take its own; his protectionism forced theirs.

The quotas, which will progressively increase, cover 26 categories of steel products where imports have been rising in recent years. They will run until mid-2021, unless circumstances change. Imports going above the quotas will incur a 25% tariff.

In regulation published Friday, the European Commission warned that the EU steel industry was “in a fragile situation and under the threat of serious injury if the increasing trend in imports continued with the ensuing price depression and profitability drop below sustainable levels.”

Of course, the U.S. has also imposed tariffs on EU steel, limiting the export potential for European producers.

As noted by Reuters, EU steel producers may favor the quotas, but European automakers have called them protectionist.