The governments of the European Union have approved the imposition of definitive tariffs of 25% on steel imports for 26 categories of steel products from third countries when they exceed a certain cap, with the aim of protecting European producers, according to information of the European Commission, published by Europa Press.
At the beginning of the month, Brussels announced to the World Trade Organization (WTO) its intention to turn into definitive the provisional tariffs applied since July 2018 as a safeguard measure after the United States approved on its part a tax on imports of this product. The provisional measures were designed as a global tariff quota. This meant that 25% of the tariffs on steel imports are applied once the EU exceeds the predefined conservative steel volumes.
The services of the Community Executive will now complete the procedure so that final tariffs can be applied as early as February. The new measures will be in effect until July 2021.
Definitive tariffs introduce “some variations” compared to the provisional measures in force – which can only be applied for a maximum of 200 days – in order to “preserve traditional trade flows”, such as, for example, that import volumes will be established on the basis of a mixed system of global and specific tariff quotas for each country.
The impact on the European renewables targets
Giles Dickson, CEO of the European Wind Energy Association (Wind Europe) has asserted “if we have to pay tariffs on our steel imports, the price of wind energy will increase“. This statement is based on the fact that steel constitutes more than half of the material used in the production of wind turbines. “The duties could add an 18% increase to the price of the turbines, which would override the cost reductions we have achieved in recent years,” Dickson explained.
In a broader vision, the scope of the measure could jeopardize EU’s renewable energy target of 32% by 2030, or simply make it difficult to achieve the objective and make it more costly than necessary for society, as they assess it from Wind Europe. Furthermore, “it would put European turbine manufacturers at a clear disadvantage compared to their Chinese competitors who obtain domestic steel at much lower prices,” the organization’s leader concludes.