The European Commission (EC) announced on July 6 that it has decided to implement provisional safeguard measures on imported steel within this month in order to protect European steel companies from U.S. steel tariffs.
The EU is going to decide on a quota in view of the steel import volume for past several years and impose a 25% tariff on the amount that exceeds the quota.
The majority of EU member countries voted for the measures in their meeting on July 5. Previously, the United States determined to impose steel tariffs in spite of opposition from a number of countries around the world. Under the circumstances, South Korean steel companies are likely to take a direct hit.
According to WTO rules, safeguard implementation takes nine months. However, a provisional safeguard measure can be immediately implemented for up to 200 days once it is determined that a sudden increase in import is leading to losses. At present, China, India, Russia, South Korea, Turkey and Ukraine are the largest steel exporters to the EU.
According to the Korea Iron & Steel Association, South Korea’s steel exports to the EU totaled 295,756 tons in January this year, 312,516 tons in February, 327,589 tons in March, 342,603 tons in April and 327,010 tons in May, accounting for 11.1% to 12.9% of its total steel exports. During the same period, South Korea’s steel exports to the U.S. totaled 275,701 tons, 308,850 tons, 251,186 tons, 204,252 tons and 158,065 tons with the ratio falling from 12.1% to 5.9% from February to May.
The EC also announced that it initiated monitoring of imported aluminum products in order to take a similar action when deemed necessary.