Gov't to make all-out efforts to address new EU steel import policy

Lead

With the European Union set to implement a new steel import regime on July 1, both the United Kingdom and South Korea are moving to protect their steel industries from the expected impact of reduced tariff-free quotas and higher tariffs. The EU's revised safeguards, aimed at addressing global overcapacity, will cut tariff-free imports from non-EU countries by 47% from 2024 levels, according to reporting by The Guardian. South Korea's trade ministry has vowed to make all necessary efforts to shield its steel companies, while the UK's business secretary is scheduled to discuss the matter with the EU's trade commissioner.

Coverage Comparison

The Guardian's coverage focuses on the UK's concerns and its parallel efforts to design its own quota and tariff system after Brexit. One Guardian report details the UK government's plan to potentially drop some planned tariffs on foreign steel after manufacturers warned of significant cost increases. Another report highlights business secretary Peter Kyle's upcoming meeting with EU trade commissioner Maroš Šefčovič in Brussels.

Yonhap News Agency's reports center on South Korea's response. One article quotes Trade Minister Yeo Han-koo as saying the government will make all necessary efforts to protect the interests of South Korean steel companies, while another features an interview with EU Ambassador Ugo Astuto, who defended the measures and expressed confidence in ongoing consultations.

Key Claims

EU's Planned Measures

The European Union plans to sharply reduce tariff-free quotas on 30 steel products and raise the tariff rate to 50 percent on imports exceeding the quotas, effective July 1, as reported by Yonhap. The Guardian adds that the EU intends to cut overall tariff-free imports from non-EU countries by 47% on 2024 levels. EU Ambassador Astuto acknowledged the tightened safeguards but rejected criticism that they amount to protectionism, arguing that the EU remains one of the world's most open markets.

Impact on South Korea

Yonhap reports that the new system is expected to have adverse effects on South Korean companies, with the quota for the EU's tariff-free steel imports nearly halved to 18.3 million tons from the current 33.8 million tons. Trade Minister Yeo Han-koo stated that the new EU steel policy could directly impact the steel industry's exports, investment, and employment. South Korea and the EU have been negotiating details of the steel quotas since April, with the minister noting that the talks are in their final stage.

UK's Domestic and EU Challenges

The Guardian reports that the UK government announced in March that it was doubling tariffs on steel imports to 50% and reducing quotas by up to 60% to save UK producers. However, ministers are now expected to drop some planned tariffs on foreign steel after UK manufacturers warned the measures would significantly increase their costs. Representatives of the Department for Business and Trade are meeting steel trading business groups to finalize details of a reprieve for certain industries.

The new UK tariffs and quotas must be in place by July 1, when the current safeguards negotiated while the UK was part of the EU expire, as reported by The Guardian. Separately, UK business secretary Peter Kyle is to raise concerns about the EU's plans to reduce tariff-free imports of British steel. The UK steel industry has previously warned of "devastating" consequences from the new EU quota system.

EU-UK Trade Tensions

The Guardian's reporting notes that the safeguards are being introduced on both sides of the English Channel to protect industries from competition from China. The EU's decision to slash foreign imports by 50% and the UK's to cut them by 60% are fueling fears of collateral damage, with China potentially pivoting to finished steel products. Several third countries, including the UK and Ukraine, are "expressing displeasure," according to one EU source quoted by The Guardian. An EU diplomat reportedly said the quotas would bring economic costs for both sides, but higher costs for the UK.

Perspectives

South Korean Government

Trade Minister Yeo Han-koo emphasized the government's commitment to protecting South Korean steel companies' legitimate interests and market access, noting that other trade measures such as tariff hikes, safeguards, and anti-dumping duties could also affect Korean exporters. He called for strengthened fair trade practices and transparency to avoid unnecessary hurdles.

EU Ambassador to South Korea

Ambassador Ugo Astuto expressed confidence that consultations over the new steel tariff scheme will produce a mutually acceptable outcome, saying the outcome will be productive and take into account the concerns of both sides. He defended the measures against protectionism criticism, pointing to the EU's openness as one of the world's most open markets.

UK Steel Industry

UK Steel, the industry body, said it had submitted "comprehensive proposals" to remove certain steel commodities from the tariff list to protect industries that cannot source those products domestically. Gareth Stace, director general of UK Steel, emphasized the need for ministers to balance protecting the broader manufacturing sector and steel plants facing the EU tariff threat.

EU Industry Body

Eurofer, the European steel association, has written to Trade Commissioner Šefčovič protesting that the UK is setting new quotas for the EU at "extreme low levels," with specific figures cited for various steel products, according to The Guardian.