The side effects of tariffs are overpowering, and European Commission officials explain the journey that tariff-eligible products are likely to take as “dynamic” from the previously attractive US market towards the European coast.
“There may be a trade shift. Some countries may not be able to choose alternative markets for products in the US,” said a senior EU official.
“Of course, we (the EU) are ready to defend the market. We are not going to absorb any amounts and amounts,” the official added.
China is in the EU’s view after imports into the US were hit by cumulative US tariffs of 54% on Wednesday. That steel could be one of the overcapacity products that will ripple over into the EU market, especially given the decline in the domestic China construction sector. “Steel could not be consumed domestically in China,” the same official said, pointing to the risk of diversion to the EU.
China and EU steel had already suffered from 25% tariffs that came into effect in mid-March. OECD data on April 1 shows that by 2024 it is expected to increase from an estimated 62 million tonnes in 2024 to 721 million tonnes. This represents more than five times the steel production of blocks, according to Eurofel, the European Association of America, which represents the steel industry.
Other Chinese products are also expected to seek new routes to sell the EU. “Electronic devices such as solar panels and wind turbines and renewable energies also represent risks in the EU,” Alicia García Herrero, an expert at Bruegel think tanks, told Euronows. Electric vehicles already subject to EU tariffs since November 2024 are on the list of products that could be subject to oversupply, she added.
The committee plans to strengthen global market surveillance if reverse US tariffs come into effect in China and other countries around the world on April 5 and 9.
“In China, we were in the steel sector before, especially when the US closed its market for Chinese imports in 2017. When we adopted safeguards,” EU officials said.
Protection measures approved under WTO rules allow for reduced imports of certain products in the event of a sudden influx of products into a certain market.
“We’ve had it in steel for a while. It’s too early to say if it’s needed for other sectors. We’re watching a lot,” the official added.
