Steel, the EU mechanism for safeguarding against duties is not enough. In Italy there is a boom in imports from Turkey, which exceeds China and India

It had to be the European response to the duties Americans onsteel. A "mechanism of safeguard"That would have protected the steel industry of the old continent. But at least in the first phase it did not prevent the steel mills all over Europe from being crushed by the competition of foreign products at low cost. According to Eurostat data processed by Ilfattoquotidiano.it, in 2018 the imports from Turkey they increased by 60 per cent in Italy, by 49 per cent in Spain and more than doubled in Belgium. A similar boom was registered by iron and steel from Russia, Serbia is Taiwan, with the consequence that imports throughout the EU were splashed last year in + 9.2%, while in the same period domestic production fell by 0.3 percent. In 2019 the trend started to reverse, but the fear is that the rules just revised from Brussels are not yet sufficient to guarantee the recovery.

What does the European safeguard mechanism provide?
To give a strong shoulder to the European steel industry crisis – which is putting thousands of jobs at risk from Poland to Italy – was the decision ofi Donald Trump to introduce 25% duties on steel imports, with the aim of defending domestic production. A mission that from its point of view can be said to be successful: according to US Department of Commerce within 12 months the Turkish steel destined for the US has dropped by 76%, the Russian one has practically halved (-42%). To avoid repercussions, the European Union immediately reacted with a mechanism that came into force in July of 2018 and became structural at the beginning of 2019. In essence it allows l"Free entry into the EU of goods from abroad only until a certain threshold is reached, calculated on the basis of imports in recent years. Once overcome – each steel category has its own – snaps tax at 25 percent. However, in order not to strangle the potential growth of trade flows, the Commission has foreseen that the "free" import ceiling increases at regular intervals of 5%. Only recently has it been decided to slow down the pace of liberalization to 3%.

The Turkish steel boom and forecasts for 2019
The result? In 2018 the Turkish imports of iron and steel in the EU increased from 4.9 to 7.6 million tonnes, for a total value of almost 5 billion euros. The same thing happened with Russia (10 to 12 million tons) and with Taiwan (+40 percent). But it is our country that is paying the highest bill, since most of the steel and iron arriving from non-European countries end up here. Within a year the Turkey has become one of the leading suppliers of Italian companies, overcoming giants like China is India. The trend seems to be confirmed also in 2019 (+42 percent in the first 7 months), but not in the rest of Europe where areverse. “Imports from third countries have decreased considerably in the second quarter (of 19%) ", says the European Steel Association Eurofer. And yet “the risks related to distortions of imports and continuous global overcapacity will probably continue to undermine the stability of the EU steel market ", especially if we consider that" the real consumption of steel continues to decline ”. According to forecasts, 2019 should close with a -0.5%.

Appeal to the EU to change the rules. The expert: "It is a political choice"
To help the market recover (which analysts see already in 2020), Brussels has just corrected some distortions of its safeguard system. But according to many, from the German Steel Federation to the Minister of Spanish Industry Reyes Maroto, up to the president of the Tuscany region Enrico Rossi, it is still not enough. The time for a new intervention by the new president Ursula von der Leyen in reality they are not as long as one might think. The European barrier was launched with an "implementing regulation" which it takes no more than 3 months to be modified. Besides the fact that there is even one in the text review clause designed specifically to be able to adapt the tariff quotas to the actual market trend. "It is an exclusively political choice," he adds Carlo Mapelli, Professor of Iron and Steel Industry at the Milan Polytechnic. "It is up to the legislator decide where to place the bar ", ie whether to favor "those who use steel or those who produce it". In the first case, he concludes, “we try to protect the competitiveness of different sectors ", while in the second" they are protected thousands of workers, in addition to profits. We need to find the right balance ”.

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