Steel industry must brace for new EU trade measures

Vietnam’s steel and aluminum manufacturers and exporters should reassess their production and export activities to the European Union (EU) while closely monitoring market developments to formulate timely response strategies if necessary.

Businesses may face problems from the EC's recently announced action plan for steel and metals. (Photo: baochinhphu.vn)

According to Vietnam’s Trade Remedies Authority under the Ministry of Industry and Trade, the European Commission (EC) recently announced an action plan for steel and metals. This plan aims to "implement measures to maintain and expand Europe’s industrial capacity in the steel and metals sectors" and is designed to "enhance the industry's competitiveness and safeguard its future."

The Trade Remedies Authority noted that the action plan includes a distinct "defensive" component, featuring several key measures that may be of particular concern to exporters of steel and metal products to the EU.

The EC has identified upcoming changes to its trade defense mechanisms to address global overcapacity, which it says poses a "serious threat" to the profitability and competitiveness of European industries.

A major adjustment involves the immediate tightening of the EU’s existing steel safeguard measures, reducing imports of affected steel products by 15%.

The EU also intends to replace its current safeguard measures with a longer-term solution. Specifically, when the existing safeguards expire on June 30, 2026, a new "long-term" measure is expected to take effect from July 1, 2026.

At this stage, the EC has yet to disclose details regarding the nature or format of the new measure, but further information is expected no later than the third quarter of this year.

To prevent circumvention of the EU’s trade defense mechanisms—such as shifting the final production stage to third countries outside the scope of current measures—the EC is considering adjustments, including the introduction of a "melting and casting" rule.

According to the EC, this rule would eliminate the possibility of altering the origin of metal products through minimal processing steps, providing greater certainty in tracing product origins. However, the Commission has not yet provided a timeline for its implementation.

In response to the EU’s series of protective measures for its domestic steel and aluminum industries, Vietnam’s Trade Remedies Authority urges industry associations and manufacturers/exporters of steel and aluminum products to reassess their production and export activities to the EU and stay updated on market developments. This will help them proactively formulate contingency plans when necessary.

 Phu Quy (ven.congthuong.vn)