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Vietnam is on the list of extensions of the EU's steel safeguard measures until June 2026

03/07/2024 15:50

On June 25, 2024, the European Commission announced a regulation on extending safeguard measures for steel for another two years, until June 2026.

 

Source: Internet

This regulation also adjusts the function of this measure to suit market conditions.

The decision follows an investigation requested by 14 EU member states, which showed that safeguard measures continue to be necessary to prevent or remedy serious damage to the EU's steel industry. In addition, it shows that the EU industry is adjusting to meet higher levels of imports.

The extension and adjustment of the Regulation is evidenced by a combination of factors that put significant import pressure on the Union market:

High global steel surplus levels and an increase in exports from China to third countries, especially in Asia, led to increased exports from those third countries to the EU. The EU survey said "Vietnam, Indonesia and Malaysia have achieved capacity growth rates of 35%  to 95%,  while steel demand decreased or increased slightly (...) and several other economies in the Middle East, South Asia and North Africa are also seeing disproportionate growth (e.g. Iran, Pakistan and Algeria)

The increasing number of trade remedies and other trade restriction measures imposed by other third countries causes direct or indirect export redirects to the EU such as Section 232 of the United States for certain steel products and other measures that some countries apply. For instance, in August 2023, Mexico increased import tariffs from 15% to 25% on some steel products. In February 2024, Brazil increased import taxes on some steel products. In April 2024, Türkiye restricted the export of some steel products to Israel

Demand in the EU has decreased significantly.  The Chairman of the OECD Steel Committee in March 2024 forecasts that in 2024 and 2025, global steel demand growth will continue to be very slow. EUROFER points out that ongoing economic uncertainty will continue to affect steel market growth in the upcoming quarters of 2024

The technical adjustments will take effect on July 1, 2024.  The measure will expire on June 30, 2026, eight years after it was first applied, which is the maximum period of safeguard measures allowed under EU and WTO regulations.  The Commission may still consider implementing this measure before 30 June 2026 if it deems further adjustments necessary.

Vietnam is also one of the countries exporting to the EU affected by the extension of this regulation. In order for Vietnam to be exempted from safeguard duties on steel products, it is necessary to maintain the export proportion below 3% of total EU import turnover for each type of product. If the quota is exceeded, the import tax rate must be pay the excess amount of 25%.

Source: Vietnam Trade Office in Belgium, Luxembourg and EU

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