Today, the European Commission has concluded its safeguards investigation initiated in March 2018, having decided to impose definitive measures. This decision had already been notified to the World Trade Organization (WTO) on January 4, 2019.
Unlike other trade remedies which aim at remedying unfair trade practices, safeguards have the purpose of protecting the domestic industry of a country (or bloc) from a sudden and unexpected increase in imports of a certain product. The investigation was opened shortly after the president of the United States, Donald Trump, decided to impose a 25% tariff on all the countries’ imports of steel, thus creating fear that a large volume of exports would then be diverted to the European market.
Provisional measures were already in place since June 2017 in the form of a tariff rate quota – that is, a maximum import quota that, if surpassed, required the payment of a 25% tariff. The definitive measures now imposed have adopted the same structure, but also set individual quotas to the largest exporting countries, in order to ensure that usual trade flows would be preserved.
Since Brazil is considered a developing country, exports of certain steel products are not subject to the measure. However, Brazil was also considered one of the largest exporters for certain other product categories, such as cold rolled sheets, having received a specific quota for those categories.
The chart below summarizes the measures to which Brazilian exporters are subject:
|No.||Category||Type of Quota for Brazil||Countries subject to a specific quota||Quota (net tonnes)||Tariff rate (once the quota is exceeded)|
|2.2.2019 to 30.06.2019||1.7.2019 to 30.06.2020||1.7.2019 to 30.06.2021|
|1||Non Alloy and Other Alloy Hot Rolled Sheets and Strips||Global||None||3 359 532,08||8 641 212,54||9 073 273,16||25%|
|2||Non Alloy and Other Alloy Cold Rolled Sheets||Country-specific||India, South Korea, Ukraine, Brazil, Serbia||65 398,61||168 214,89||176 625,64||25%|
|6||Tin Mill products||Country-specific||China, Serbia, South Korea, Taiwan, Brazil||19 730,03||50 748,55||53 285,98||25%|
|7||Non Alloy and Other Alloy Quarto Plates||Global||Ukraine, South Korea, Russia, India||466 980,80||1 201 143,58||1 261 200,76||25%|
|8||Stainless Hot Rolled Sheets and Strips||Global||China, South Korea, Taiwan, USA||10 196,61||26 227,19||27 538,55||25%|
|17||Angles, Shapes and Sections of Iron or Non Alloy Steel||Country-specific||Ukraine, Turkey, South Korea, Russia, Brazil, Switzerland||8 577,95||22 063,74||23 166,93||25%|
|24||Other Seamless Tubes||Global||China, Ukraine, Belarus, Japan, USA||55 345,57||142 356,97||149 474,82||25%|
The measures shall stay in place for three years, expiring on June 30, 2021. The European Commission shall conduct periodic reviews of the measure to analyze whether they need to be reviews in light of any changes of circumstance. The first of such reviews shall begin no later than on July 1st, 2019.