The European Automobile Manufacturers' Association (ACEA) announced that it is closely monitoring the European Commission’s proposal to expand measures protecting the EU steel market. Automotive manufacturers source approximately 90% of their direct steel purchases from the EU and are concerned that the safeguard measures could have inflationary effects on market prices.
ACEA noted that proposed changes, particularly significant quota reductions and the increase of out-of-quota tariffs to 50%, would reduce the potential to alleviate import pressure in the European market. In addition, it warned that implementing a new “melt and pour” origin rule would create a substantial administrative burden for European companies using imported steel products.
The Commission is urged to consider the obligation for producers in sectors heavily dependent on domestic steel supply, such as the automotive industry, to import steel of specific quantities and qualities. According to ACEA, quotas for automotive grades have consistently been rapidly exhausted during the seven years that the safeguard measures have been in place, and the application of the “melt and pour” origin rule adds further complexity to already intricate supply chains.
ACEA Director General Sigrid de Vries commented:
"European steel is undergoing a decarbonization transformation, and our sector faces numerous challenges to maintain competitiveness. We do not oppose a certain level of protection for a commodity like steel; however, the parameters proposed by the Commission go too far in shielding the European market. This measure needs to strike a better balance between European steel producers and users."
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