EU cuts overall steel import quotas in half while negotiating higher allocations for dozen trading partners

The European Union is halving its overall duty-free steel import quota to 9.15 million tonnes starting July 1, 2026, to counter cheap Chinese imports and US tariff diversion. While thirteen free-trade partners, including the UK, secured preferential allocations—with Britain obtaining a 2.14 million tonne quota—domestic producers like Tata Steel UK face a 60% export cut. Industry bodies welcome the protectionist measures, which aim to restore 15 million tonnes of European production.

EU steel import quota reductions

• ▪The European Union doubled tariffs to 50% for all steel imports exceeding the established tariff-free quotas
• ▪The European Union granted a special export status to Ukraine to support the country's steel exports while it remains at war
• ▪The European Union reduced its overall tariff-free steel imports from non-EU countries by 47% on 2024 levels, effective July 1, 2026

Chinese steel overcapacity concerns

• ▪The European Union's steel import curbs aim to counter cheap Chinese steel imports amid rising global steel overcapacity
• ▪The Organisation for Economic Co-operation and Development projects global steel overcapacity to grow to 721 million tonnes by 2027

US tariff diversion effects

• ▪The United States' imposition of 50% tariffs on steel imports in April 2025 diverted the global steel surplus toward the European market
• ▪A senior European Union official stated that the bloc was forced to introduce safeguard measures because diverted steel was hitting the United States market wall and entering the European market in greater numbers

UK allocation negotiations

• ▪Thirteen trading partners with free trade agreements, including the United Kingdom, received smaller steel quota cuts of approximately one-third
• ▪The United Kingdom government secured a tariff-free steel quota of 2.14 million tonnes out of the European Union's total 9.15 million tonnes limit

Tata Steel UK impact

• ▪Tata Steel UK, the largest steel producer in Britain, had its duty-free exports to the European Union reduced by 60%
• ▪Tata Steel UK chief executive Rajesh Nair stated that the 60% reduction in tariff-free European Union quotas is likely to significantly impact the company's United Kingdom business

Industry trade body responses

• ▪European steel association Eurofer director general Axel Eggert stated the new curbs could restore up to 15 million tonnes of lost European steel production
• ▪UK Steel director general Gareth Stace welcomed the deal but emphasized that 70% of British steel exports go to the European Union, requiring wider export access