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What should the industry do? For the moment, it is a case of wait and see as to what measures (if any) are deemed necessary following the Commission’s investigation. The Commission has a delicate balancing act and must be seen to balance the various competing interests in this investigation (i.e. the EU steel industry vs those EU industries which rely on steel imports from outside the EU). Clearly this uncertainty has created significant industry concerns given there is no indication from the announcement of the safeguard investigation how quickly the Commission might take action and what form that action could take. Such uncertainty can paralyse a market very quickly. In addition to closely following the investigation, those dealing in the trade of the relevant steel product would do well to adopt a pessimistic viewpoint and review their standard terms and conditions of sale to ensure these are drafted to take account of any possible additional tariffs (if the Commission does chose to impose them) while optimistically hoping such forward planning is not ultimately necessary.
– provisional measures (these cannot exceed 200 days) may be imposed in critical circumstances and if a preliminary determination provides clear evidence of harm or impending harm; or – definitive measures must not exceed 4 years (including the duration of the above provisional measures) unless extended to a total maximum of 8 years. The Commission will send questionnaires to the known producers of like or directly competing products and to any known associations of producers, within the EU. The completed questionnaires must reach the Commission within 21 days from the date on which they are sent to the party and it is not yet clear how quickly a preliminary determination will be made such that provisional measures could be deemed necessary. Politics and consequences The EU could decide that no measures are necessary. In advance of the issue of the Commission’s Notice, in an interview with the Financial Times discussing the Trump administration’s decision to levy national security tariffs on imports of metals, Cecilia Malmstrom, the EU trade commissioner, had noted that “imposing sweeping measures [like this] generally is not the way forward … we risk seeing a dangerous domino effect from this”. However, EU officials are worried that US tariffs could lead to the diversion of steel intended for the US to the EU and this concern added to an increase in imports has finally led to the launch of a safeguard investigation. If the Commission does conclude that measures are required, those measures will apply to all non-EU countries without discrimination (save for developing countries with low import shares). This means that leading exporter countries such as China, India, Russia, South Korea and Turkey will be hit with the added possibility of retaliatory measures from those countries most effected (e.g. at present around 40% of Indian steel exports go to EU). Unsurprisingly, China’s Ministry of Commerce has said that it does not consider adopting global safeguards to be the right choice.
“If the Commission does conclude that measures are required, those measures will apply to all non-EU countries without discrimination (save for developing countries with low import shares).”
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