European downstream manufacturing associations have jointly voiced serious concerns over the European Commission’s proposal to extend and tighten steel safeguard measures aimed at addressing global overcapacity.
While acknowledging the need to support EU steel producers and counter market distortions linked to excess global capacity, the organizations argue that the proposed approach overly insulates the EU steel market and fails to strike a balanced outcome for steel-using industries.
Tariff impact estimated at up to €9 billion
According to the joint statement, the proposal would significantly reduce total import quota volumes while increasing out-of-quota tariffs to 50 percent.
Assuming import volumes remain broadly in line with recent levels, downstream industries estimate that additional annual tariff costs could range between €5 billion and €9 billion. These costs would be borne by manufacturers across a wide range of industrial value chains.
Steel price increases seen as a major threat
The European Commission’s own analysis projects an average increase of 3.25 percent in EU steel prices. However, the signatory associations warn that price rises could be substantially higher in specific product segments, potentially reaching up to 30 percent.
Such increases would weaken the competitiveness of both import-dependent manufacturers and companies sourcing steel within the EU, particularly in highly competitive global markets.
“Melt and pour” rule raises administrative concerns
The proposed introduction of the “melt and pour” rule was highlighted as another major challenge. According to the associations, this requirement would significantly increase administrative complexity, especially for small and medium-sized enterprises.
They argue that compliance would be impractical for low-value consignments and called on policymakers to adopt a more gradual and workable implementation framework.
The associations also warned that tighter safeguards could restrict access to specialized and high-quality steel products that are not produced in sufficient quantities within Europe, but which remain essential for advanced industrial and manufacturing applications.
Cumulative regulatory burden highlighted
The statement stressed that the impact of the proposed safeguards would compound existing regulatory pressures, including the implementation of the Carbon Border Adjustment Mechanism (CBAM) and the phase-out of free allowances under the EU Emissions Trading System (ETS). Together, these measures are expected to further increase costs across industrial value chains.
Call for a more proportionate approach
The downstream industries urged EU policymakers to exclude close trade partners, such as Switzerland, that do not contribute to global overcapacity and that supply sustainable, high-quality steel inputs to integrated European value chains.
They concluded by calling for a more proportionate and carefully calibrated approach during the legislative process, warning that excessive safeguards risk undermining the competitiveness of Europe’s steel-using industries.