- The EU opted to make previously temporary steel tariffs permanent Wednesday matching US tariffs on imports.
- The move highlights that protectionism is spreading and Donald Trump’s trade war with China is entrenching itself into global economy.
- European automakers are “extremely disappointed” with the move restricting imports sending carmakers’ share prices lower.
European officials said today they will make tariffs on steel imports to the region permanent to help stem the glut of supply sparked by Donald Trump’s trade war against China.
The move highlights that protectionism is spreading and Donald Trump’s trade war with China is entrenching itself into the global economy.
The EU will impose quotas on 26 product categories and levy a 25% duty on imports exceeding those quotas, the executive arm said on Wednesday. The move cements proposals laid out last July with the stated aim of protecting European steelmakers amid Chinese overcapacity.
European producers feared that European markets would be flooded by steel products that are no longer being imported into the US.
But automakers railed against the decision.
The European auto manufacturers association ACEA said it was “extremely disappointed” and called the measures protectionist, citing statistics showing that steel exports to the US had only dropped marginally, meaning little extra steel was being imported to Europe.
“These measures do not take into account the needs of downstream users of steel, such as the automotive sector,” it said in a statement.
Renault is down 1% as of 10.30 a.m in London (5.30 a.m EST) while German manufacturers such as Volkswagen, BMW, and Daimler are all at least 0.9% lower.
European steel imports jumped to a record in the first 10 months of 2018, up 12% on the same period in 2017, according to the European Steel Association, Eurofer. Similarly, US imports fell 14% and global exporters diverted 60% of that steel to the EU. The EU’s decision will see the safeguards remain until July 2021.
The main exporters of steel to the EU are China, India, Russia, South Korea, Turkey and Ukraine.