The global steel market will face further constraints from early next week when the European Union will impose import restrictions to protect its market against an expected surge in trade following last week's introduction by the US of hefty steel duties.
The European Commission will next Wednesday introduce tariff rate quotas on 15 categories of steel product, which would mean the imposition of tariffs of 14.9 to 26 per cent on all imports above set quotas. The US immediately said it would consider challenging the action at the World Trade Organisation.
The decision comes despite disquiet among more liberal EU member-states and as the EU considers a list of 316 US products ranging from motorbikes to underwear that could be the targets of retaliation, unless Washington agrees to pay the EU compensation for lost steel trade.
The safeguard measures, expected to enter into force shortly after Easter, would cover imports of around 5.7 million tonnes of steel over the initial 200-day period of their operation, accounting for about 40 per cent of EU steel imports.
The EU believes it already has evidence of increased imports into its market since President Bush announced tariffs of up to 30 per cent on steel entering the US.
The EU normally expects to import around 27 million tonnes of steel annually but fears that could increase by as much as 15 million tonnes following the partial closure of the US market
