By Edith Hancock
The European Union will limit the amount of tariff-free steel its member states can import from Wednesday, as part of officials' efforts to protect its steel industry from oversupply from countries like China.
The EU said it is seeking to safeguard its steel sector from a 620 million metric ton glut of products in the market. The bloc's new system would cut tariff-free steel import volumes by 47% to 18.3 million tons, while imports above that quota would face a higher 50% levy in 26 categories of steel products.
The European Commission said on Tuesday that half of that 18.3 million ton tariff-free quota is set aside for countries with free trade agreements with the EU, with the other half available to all trading partners, including those with FTAs. The commission said the move is designed to cushion the impact of its regime change on countries it has closer ties with. It said that many countries with FTAs will receive country-specific quotas reflecting their historic import volumes.
Some countries with FTAs have provisionally agreed to quotas, the commission said, adding that those with an agreement will have their tariff-free quotas brought down by around one-third as opposed to the 47% average. Officials said that 13 countries with an agreement--including Turkey, India, South Korea and the U.K.--will receive more favorable terms, adding that the EU's executive arm can adjust its country allocations in the future.
The measures, which were originally proposed by the commission in 2025, also require exporters to outline where the melting and pouring of steel took place to make it easier to trace imports.
"We are providing market participants with predictability through clear and transparent quota distribution rules, while applying a fair and objective methodology," Maros Sefcovic, the bloc's top trade negotiator, said in a statement Tuesday.
Write to Edith Hancock at edith.hancock@wsj.com