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Such competition [arising from China's steel overcapacity] brings the threat of deindustrialisation in that sector – mirroring an existing trend for aluminium, which would hamper the continent’s efforts to ramp up its military industrial base “with the flexibility and speed required in a fast-changing geopolitical context”.
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The EU has long railed against China’s steel output, which represents more than half of the world’s total, but has been stirred into action by two factors emanating from the United States.
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“The industry remains threatened by global excess capacities and by global distortions from China and other countries that artificially support their domestic industries or circumvent EU trade defence measures and sanctions,” the plan said.
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In a “Steel and Metals Action Plan” unveiled on Wednesday, the plan proposed tightening steel import quotas by April 1, to reduce imports by a further 15 per cent. This would be an extension of a safeguard measure in place since 2018, which is set to expire in just over a year, a measure it also wants to expand in light of recent events.
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“Our competitors must not be able to take advantage of gaps in our regulatory framework, and this is why we are planning to make some changes,” said Stephane Sejourne, the European Commission’s executive vice-president.
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European Steel Association data show China produces 55 per cent of global crude steel output. The new plan estimated that in 2024, global steel overcapacity was “more than four and a half times the EU’s yearly consumption”.
According to the OECD, “China’s steel trade surplus has surged to nearly 100 million metric tonnes in 2024, on an annualised basis, a massive leap that is affecting competition across global steel markets”.
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Chinese steel products are the most common targeted by EU regulators, which has seven ongoing trade investigations into Chinese steel products, as well as existing import restrictions and tariffs in place.
The commission now wants to start opening probes preemptively, looking for the threat of injury, rather than substantial economic harm.
“To address the fast developments in global markets and to protect the industry, the Commission will strengthen the monitoring of trade flows and will proactively open investigations based on a ‘threat of injury’, without waiting for material injury to occur,” the plan said.