On March 26th, the European Commission initiated a safeguard investigation into the importation of certain steel imports in response to the recent enactment by the United States government of blanket tariffs on all aluminium and steel imports.
Twenty-six steel product categories fall under the purview of the 9-month investigation announced yesterday, and, in the event that provisional remedies prove necessary, such remedies may be enacted with little notice. Several aluminium associations active in Europe have called on the Commission to extend the investigation into aluminium products as well.
Per the Commission, the steel surveillance system is recording an ongoing uptick in the importation of specific steel products. The Commission fears that this rise may become even steeper, exacerbated by a sudden glut of steel once bound for American ports. Such now-orphaned steel is highly likely to be redirected to European destinations, causing an overabundance of supply and a corresponding depression in steel prices.
The investigation, which is one of a trio of tools available to the European Commission, examines steel imports from all destinations. In addition, the investigation is not prejudicial in nature, but it may result in tariffs and/or quotas if investigators believe it necessary in protecting European producers from injury.
According to the Commission, the World Trade Organization recognizes safeguard measures as being a legitimate trade tool for use in defense of the tariffs facing it from the United States government.
The European Commission reiterated its commitment to the situation facing European smelters, and promised to take necessary measures at appropriate times.
The investigation by the European Commission is the latest move closer to what some analysts fear is a trade war between the United States and the European Union. In March the Trump administration announced blanket tariffs on all steel and aluminium imported into the country, citing the results of an investigation into national security concerns. A handful of countries and the EU were granted temporary reprieves to the tariffs, but the Trump administration expects to initiate the tariffs on those countries should no long-term agreements be in place soon.
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