EU proposes halving steel import quota and doubling out-of-quota tariffs to 50% • FRANCE 24

EU proposes halving steel import quota and doubling out-of-quota tariffs to 50% • FRANCE 24

Yuka joins me in the studio. Hi Yuka. Hi Inca. So the European Union appears to be taking a page out of Donald Trump’s protectionist uh playbook on steel. Yeah. The European Commission has proposed cutting free trade quotas by 47% to 18.3 million tons for steel and steel products while doubling the out of quotota duty to 50%. The EU’s new strategy mirrors the one embraced by the US president who slapped 50% tariffs on steel imports, including on European steel, which still remain in place despite a recent trade deal. Washington’s protectionist move has raised concern that cheap metals diverted from the US market by the higher tariffs could flood European markets. The primary target is China, which is by far the largest exporter of steel. Last year, China accounted for more than half of the roughly 1.9 billion tons of crude steel produced around the world and is accused of helping fuel a global overupp of steel. Here’s the EU’s trade commissioner speaking earlier. The global order capacity crisis is reaching critical levels. On top of this, third countries are closing off the markets. They are raising tariffs. introducing safeguards while the EU market remains largely open and under intense import pressure. In just a decade, the EU steel trade balance has deteriorate dramatically. From 11 million ton surplus to 10 million ton deficit, trade remains high on the agenda as US President Donald Trump hosts Canada’s uh Prime Minister Mark Carney in the Oval Office. Well, it’s the second White House visit for Mr. Carney, who took over as prime minister from Justin Trudeau in March. The Trump administration has slapped steep tariffs on Canadian cars, steel, and aluminium, and is preparing to introduce new duties on softwood, and lumber after initially hitting back with titar. Ottawa has since abandoned that approach and made significant concessions. Still, Canada’s economy is suffering and the two sides have not reached a bilateral deal. For now, a majority of Canadian exports remain protected by a US, Canada, Mexico free trade agreement, but that will come up for renegotiation soon. The two leaders struck a cordial tone before they headed off to a closed door meeting. Let’s take a listen. Many respects. The problem we have is that they want a car company and I want a car company. Meaning the US wants a car company and they want steel and we want steel, you know. So, we have a natural conflict. It’s a natural business conflict. Nothing wrong with it. Uh and I think we’ve come a long way over the last few months. Actually, there are areas, as the president just said, where we I wouldn’t conflict, maybe not so much conflict. We compete. There are areas where we compete. And it’s in those areas where we have to come to uh an agreement that works. But there are more areas where we are stronger together, and that’s what we’re focused on. Well, the US president has also voiced optimism about a real chance to end the war in Gaza. Two years on uh from the conflict that has left the enclave in tatters. Yeah, Yinka, we know that the situation is dire there. More than half a million people in Gaza are facing famine as the cost of fuel and food has skyrocketed. Almost all economic activity has come to a standstill. In the West Bank, the Palestinian Authority also seems to be holding on by a threat. Luke Shrego takes a deeper look. Since Israel went to war in Gaza in October 2023, the Palestinian enclaves economy has fallen off a cliff. With its infrastructure and arable land in ruins, nearly every household is living in poverty and reliant on humanitarian aid. Inflation surged by over 230% in 2024, according to a recent World Bank report, which outlined dire circumstances. Recovery and reconstruction needs in the short, medium, and long term across the Gaza Strip are estimated at 53.2 billion US dollars, which is equivalent to over three times the preconlict annual GDP of the West Bank and Gaza together. The economic spillover into the West Bank is also worse than ever with Israel clamping down on both the movement of Palestinian workers and tax revenue. Workers in Israel were the primary source of income to the Palestinian economy and other sectors were other sources too. What makes the economic situation worse is the Israelis are withholding the funds. Israel collects duty on goods passing through its territory to the West Bank and makes monthly transfers to Ramala. But it’s been withholding clearance revenues since the start of the war, amounting to 68% of the Palestinian authorities budget since May. That’s the equivalent of over €2.5 billion. Money that’s no longer available for public services like schools, pensions, the health service, or salaries, which fell to half their normal levels in June. What’s more, the Israeli finance minister cut off all possibility of Israeli and Palestinian banks interacting in June, intent on economically strangling the territory to prevent the creation of a Palestinian state. And here in France, Juka, the political crisis has reached a new peak and financial markets have reacted. Well, French stocks h have somewhat recovered from a heavy selloff uh on Monday, triggered by the resignation of Prime Minister Sebastian Lucu less than 14 hours after announcing a new cabinet. The deepening political crisis makes it almost impossible for France’s divided parliament to pass next year’s budget on time. For it to become law by the 31st of December, the bill needs to be presented to parliament by October the 13th at the very latest, a deadline that looks increasingly unattainable. A US style government shutdown though won’t happen here as in the case of last year, the French government can keep running on an extension of this year’s budget until a new budget is adopted. But that scenario will likely worsen France’s already strained public finances. Mr. Konu has now been tasked by the president to hold last stitch talks with other political parties to try and resolve the deadlock. But the heightened uncertainty has sent France’s borrowing costs higher, which has already soared over the past 5 years. The spread between French and German 10-year bond yields has now widened to more than 86 basis points, meaning the interest France has to pay is almost 0.9% higher than for Germany. And that’s it from the business desk. Yuka, appreciate that update in business. Thank you so much for that. Stay with us here on Prime Paris. We’re going to take a very short break.

The European Commission has moved to cut free-trade quotas by 47 percent for steel and steel products and to double out-of-tariff import duties to 50 percent, taking a leaf out of US President Donald Trump’s protectionist playbook. It’s a way to protect the continent’s struggling industry in the face of Trump’s disruptive trade policy and global oversupply of the metal. Meanwhile, Trump hosts Canada’s Prime Minister Mark Carney as the two sides hope to work out a trade deal. 
#EU #Steel #Tariffs

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