The coronavirus crisis could lead to huge steel stockpiles that could then flood the European Union when demand returns, the EU trade director said Tuesday, saying this is what the EU bloc would find a way to fight back.
The EU introduced protective measures in 2018 to control steel imports to protect European producers after Washington imposed a 25% tariff on many exporters.
Quota for 26 types of steel, including stainless steel, was set at an average of imports in 2015-2017 plus 5%, with an increase of 3% last year. Imports exceeding the quota are subject to 25% tax.
EU Trade Commissioner Phil Hogan said on Tuesday that the adjustment for this year will take place on July 1 as planned. Initially, the Commission planned to increase by 5% in the quota, although this could be considered.
Many legislators and EU countries have expressed concerns about the possibility of steel reserves, especially China, and what will happen to this inventory when the restrictions are relaxed, Hogan said.
We are considering evaluating steel protection measures in this context, he told members of the European Parliament in the online conference.
Third-party exporters can cause serious damage to the EU market, he said, depending on their behavior when demand in the 27-nation bloc revives.
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