The European Union is drafting measures to shield its aluminum industry from a potential surge in imports diverted due to U.S. President Donald Trump’s 25% tariffs on metals, according to a leaked EU plan. The bloc is considering import limits, stricter origin rules, and export duties of up to 25% on scrap metals to prevent a global oversupply crisis from destabilizing its market.
Key Measures:
Import Safeguards: The EU will explore aluminum import restrictions to avoid trade diversion, mirroring existing steel safeguards. A new “melted and poured rule” will combat origin fraud by requiring metals to undergo substantial processing in their declared country.
Scrap Metal Duties: Proposed export tariffs on scrap metals aim to retain raw materials for EU producers, addressing concerns that cheap exports undermine domestic supply chains.
Steel Quota Overhaul: The EU will propose tariff rate quotas for steel by Q3 2024, replacing expiring measures in 2026.
Context:
Trump’s tariffs have heightened fears that aluminum and steel exports originally bound for the U.S. will flood Europe, exacerbating a glut driven by Chinese overproduction. EU aluminum producers have lost 50% of primary production capacity since 2021, with imports capturing 40% of the market. The draft plan, part of the EU’s Clean Industrial Deal, seeks to revive competitiveness against U.S. and Chinese rivals while advancing green transition goals.
Industry Impact:
Scrap Metal: Export restrictions could disrupt global recycling markets but bolster EU smelters reliant on affordable scrap.
Trade Defense: Enhanced anti-circumvention rules target minimal processing hubs used to bypass tariffs.