Europe Adopts Steel Industry Safeguards

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

To protect its struggling steel industry, from July 1 the European Union (EU) will slash the amount of tariff-free steel imports by almost half to 18.3 million tonnes per year (MT/yr) and double the tax on out-of-quota steel imports to 50%.

Protecting European Steel

The European Parliament has adopted proposed measures that will see the European Union (EU) reduce tax-free steel imports to 18.3 million tonnes per year (MT/yr) while also doubling the tax on out-of-quota steel imports to 50%, up from the current 25%. The vote was carried strongly by 606 votes in favor, 16 against and 39 abstentions. 

The measures will apply to 30 categories of steel products imported to the EU from July 1 and are designed to protect Europe's struggling steel industry from the negative effects of a global steel surplus and cheap Chinese imports. According to Industrial Info Resources data, there are more than 600 steel mills and smelters in Europe, led by Germany, France and Italy.

Europe's steel industry produces approximately 146 million tonnes of steel annually, contributing 215 billion euro (US$253 billion) in value to the region, and employing 298,000 people directly and another 2.5 million in associated industries. The European Commission (EC) first announced the planned measures in October last year. For additional information, see October 15, 2025, article--Europe Doubling Steel Import Tax to 50%, Halving Import Quotas. 

"Melt & Pour" Rule

The regulation introduces a "melt and pour" rule, under which the origin of steel is determined by where it is first melted and cast, strengthening traceability and limiting circumvention through minimal processing in third countries. The EC will take into account the origin of steel when assigning annual quotas using enhanced monitoring and anti-circumvention tools. 

Karin Karlsbro (Renew, SE), lead negotiator of the measures, said: "Europe needs a strong and competitive steel industry built on trade, innovation and fair competition. Combatting the negative trade effects of global overcapacity is essential, and I welcome the exemption for Russian steel slabs not being extended. At the same time, Ukraine must not be punished by EU measures while its steel industry is under direct Russian attack. Ukraine is not the source of global overcapacity. We must treat them as a future EU member and strategic partner, and the EU must now live up to our promise that Ukraine will receive special status under the new regulation."

Tough Conditions for European Steel

The Parliament agreed that that sector has faced trade-related challenges, including "significant and sustained import pressure in terms of volume and prices, as result of global overcapacity". It has also seen about 100,000 job losses since 2008. Europe has lost approximately 65 million tonnes of capacity since 2007, according to EC data. In 2024, the region's capacity-utilization fell well below the so-called healthy rate of 80%, reaching just 67%. 

U.K. Seeks Exemption Deal

The U.K. is negotiating with the EU to be exempted from the new steel import quotas. The country, which exited the Union in 2020, wants a carve-out deal for its own steel industry, which is under threat. British Trade Minister Chris Bryant said he has had "very productive conversations" with his EU counterparts and said he expects a deal will be forthcoming. "We need to make sure that we don't provide a problem for each other because, frankly, the problem of over-capacity in steel, which undermines sovereign steel capacity on the continent of Europe, is not provided by us, it's provided by China and some other countries in the world," Bryant told Euronews. The U.K. government had had to bail out its major steelmakers in recent times in an effort to keep the sector afloat. Most recently, the government announced a plan to nationalize one of its few remaining steel producers, British Steel, having previously taken control of the company away from Chinese company Jingye - a move that has angered the Chinese government. For additional information, see May 24, 2026, article--U.K Plan to Nationalize British Steel Angers China.

Industry Happy...But More Needed

Europe's steel industry has welcomed the adoption of the measures, calling it an important step towards addressing "the growing pressures facing the sector from record imports, global overcapacity and rising international protectionism". Axel Eggert, director general of the European Steel Association (EUROFER), said: "At a time of growing geopolitical uncertainty and market distortions, this sends an important signal that the EU is prepared to act to defend its industrial base, security and autonomy. There must now be no delay in ensuring the measure enters into force by 1 July 2026, when the current safeguard expires." The association also underlined that protecting European steel production and securing European steel demand "must go hand in hand". It wants the same strategic approach to be extended to downstream steel-containing goods in order to strengthen the wider European industrial value chain. 

Key Takeaways

• Europe clears the way to enact new protectionist steel import quotas and higher taxes on July 1. 
• The U.K. wants a carve-out deal with the EU to protect its own struggling industry.
• According to Industrial Info Resources data, there are more than 600 steel mills and smelters in Europe, led by Germany, France and Italy.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).