EU halves duty-free steel quota but UK and other partners given better rate

The EU has halved the amount of duty-free steel it will accept from abroad, but has agreed higher import levels for more than a dozen trading partners, including Britain.

The curbs are designed to reduce cheap Chinese steel coming into the bloc. However, 13 countries with a free trade agreement (FTA) with Brussels, including the UK, have had their quota reduced by only a third.

“The commission is putting in place the practical arrangements needed to ensure that the EU’s steel measure operates effectively from day one,” said the EU trade commissioner, Maroš Šefčovič.

“We are providing market participants with predictability through clear and transparent quota distribution rules.”

The new steel safeguards mark the biggest divergence in trade with the UK since Brexit in 2020 and match similar moves announced last week by the UK to reduce foreign imports and boost domestic industries.

They were originally announced to slow down the use of Chinese products in European industries, particularly after trade was diverted from the US as a result of Donald Trump’s “liberation day” tariffs launched in April 2025.

A senior EU official said the EU had been “forced” to act “not because we were copying the US but because overcapacity to our market”.

As the US “built the wall around their market” steel was being diverted to the EU “in greater numbers”, the source added, admitting conversations with trading partners were “not easy”.

Axel Eggert, the director general of the European steel association Eurofer, described the new curbs as a game-changer for the continent’s steel industry, saying they paved the way “for restoring up to 15m tonnes of lost European steel production”.

Britain’s equivalent trade body, UK Steel, also welcomed the deal, but said it hoped for “further improvement in volumes as the UK and EU continue their reset talks”. Those negotiations have been put back to the autumn after Keir Starmer’s resignation.

The group’s director general, Gareth Stace, said the EU and the UK were “interdependent” with 70% of British steel ending up in the bloc.

“Securing wider export access for certain high value steel products will be critical for the long-term viability and profitability of the UK steel sector,” he said. “We hope both sides will take a reasonable view of each other’s needs as discussions take place over the coming months.”

The EU announced last year the plans to cut overall tariff-free imports from non-EU countries by 47% on 2024 levels from 1 July 2026 and double tariffs to 50% for all imports outside those quotas.

However, it has struck deals with countries with which it already has a FTA, allowing them to sell between 66% and 67% of their historic trade on average. The allocations can be adjusted if necessary if there are shortages in supply in particular types of steel.

The countries receiving better terms are the UK, Turkey, India, South Korea, Indonesia, Egypt, Brazil, Switzerland, North Macedonia, South Africa, Argentina, Ukraine and Singapore. The UK government said it had secured a tariff-free quota of 2.14m tonnes out of the total 9.15m limit set under the new EU system.

There are 28 categories of product covered, ranging from rolled steel used in the automotive industry to bars used in construction to reinforce concrete. The quotas allocated to the 13 countries with FTAs were “linked to past trade”, EU officials said.

The UK steel industry has previously warned of “devastating” consequences from the EU’s planned quota system. The quotas are based on trade data from 2022 to 2024.

The new rules quash hopes that the EU and the UK could forge a strategic “steel club” alliance under which they would give each other tariff-free trade and work together against China.

Officials said they wanted to create a system that would solve problems for some countries without creating issues for others and still hoped to set up a steel club with the US and the UK to ringfence domestic markets from rivals who do not play by the rules.

The quotas could be adjusted if shortages in supplies emerged, an official said.