Posted By Global Banking and Finance Review
Posted on March 17, 2025
By Julia Payne
BRUSSELS (Reuters) -Concerns that the Trump administration’s metals tariffs could divert a wave of aluminium to Europe have prompted the European Commission to consider possible curbs on imports, a draft EU plan shows.
The EU is also considering duties on its own exports of scrap metals to shore up the industry, according to the plan.
U.S. President Donald Trump increased tariffs on steel and aluminium imports to 25% last week, prompting the EU to announce tariffs on up to $28 billion worth of American goods.
The EU already has safeguards in place, which include import limits, for steel and it launched a probe for alloys in December. However, the steel and aluminium industries have been calling for more action to protect them from a global glut, notably coming from China, which is set to worsen for Europe as metal is diverted away from the United States.
"EU producers lost substantial market share over the last decade and, in addition, around 50% of primary production capacity remains curtailed since 2021," the draft document said.
"The recently announced US tariffs on aluminium are likely to worsen the situation further with a significant threat of trade diversion from multiple destinations."
The Commission will also make a new proposal by the third quarter this year for a trade measure for steel "based on tariff rate quotas" to replace the existing ones expiring on July 1, 2026.
To further boost its existing trade defence measures, the Commission will implement a "melted and poured rule". The rule would stop importers from changing the metal's origin "by performing minimal transformation."
The Commission plans to propose export duties and restrictions on scrap metal exports in the third quarter this year. People familiar with the matter said the Commission was weighing export duties of up to 25% on scrap metal.
The steel and metals action plan is one of the key pillars of the EU's plan to revive its industries with the Clean Industrial Deal and stay competitive with Chinese and U.S. rivals. The plan is due to be announced on Wednesday and may still be amended before then.
(Reporting by Julia Payne; Editing by Tomasz Janowski and Hugh Lawson)
