European carmakers source 94% of their steel from the EU © zhu_zhu/123RF
European carmakers source 94% of their steel from the EU © zhu_zhu/123RF

EU steel tariffs 'a real risk' to automotive sector

17 January 2019

EU automotive manufacturers have raised concerns over restrictions on steel imports.

Following a vote of member countries, the European Commission (EC) has capped countries’ imports to the EU at “traditional trade flows”, above which a 25% tariff will apply. This will start on 4 February and expire on 16 July 2021.

The measures were placed in order to avoid a continuing influx of steel into the EU following an increase in  US import tariffs on steel in March 2018.

Countries' trade flows to the EU will be calculated based on figures from the past three years, while developing countries whose share of imports is below 3% will be exempt.

“These protective measures pose a real risk to the competitiveness of European auto manufacturers,” said secretary general Erik Jonnaert of The European Automobile Manufacturers’ Association (ACEA).

“This also comes at a time when our industry already has to contend with major trade-related challenges: the threat of tariffs on imports of vehicles and parts to the US, the decline in the Chinese market, not to mention the prospect of a no-deal Brexit.”

The ACEA said European carmakers sourced 94% of their steel from the EU and it was concerned over “the inflationary effect that this safeguard will have on EU steel prices and the scarce capacity of EU producers to fulfil orders today”.

“The cost of automotive grades of steel has been consistently high for several years and delivery lead times have lengthened considerably. Meanwhile, through consolidation in the European steel industry, the pool of EU producers is getting smaller and the scarce capacity for automotive steel is getting ever tighter,” said the ACEA.

Eurofer, the European steel association, welcomed the move by the EC, saying EU steel imports rose by an unprecedented 12% in 2018.

Axel Eggert, director general of Eurofer, said: “For every three tonnes of steel blocked by the US’ section 232 tariffs, two tonnes have been shipped to the open EU market.”

Eurofer expressed concern at plans by the EC to increase amount countries could export to the EU before tariffs apply, “leaving EU producers to fight over a shrinking market share”.

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