BRUSSELS, Oct. 8 (Xinhua) -- The European Automobile Manufacturers' Association (ACEA) said Wednesday it is most concerned about the inflationary impact that an effective continuation of the European Commission's steel safeguard will have on European market prices.
ACEA warned that changes to key safeguard parameters - in particular the dramatic lowering of quotas and the doubling of the out-of-quota tariff to 50 percent - will significantly reduce the possibility of relieving pressure in the European market through imports.
In addition, a new rule of origin based on the "melt and pour" principle will further restrict imports and create a massive administrative burden for European users of imported steel products.
The commission needs to look individually at sectors such as automotive where, despite a heavy reliance on domestic steel supply, manufacturers still need to import certain quantities and qualities. Quotas for automotive grades have consistently been rapidly exhausted over the last seven years of the safeguard. The commission also needs to understand the complexity of applying the "melt and pour" rule of origin in deep and global supply chains such as automotive.
"European steel is undergoing a decarbonization transformation and we recognize in that sector many of the challenges that we have in making our industry competitive during radical change," ACEA Director General Sigrid de Vries said. "But we feel that the parameters as proposed by the commission go too far in ring-fencing the European market. We need to find a better balance between the needs of European producers and users of steel in this measure."
In addition, the China Chamber of Commerce to the EU (CCCEU) said the decision to align with certain countries' unilateral tariff approaches risks further fragmenting global steel trade and undermining the stability of international supply chains.
While the measure is presented as a defensive safeguard, it in fact represents a protectionist step that could generate significant and challenging spillover effects across downstream industries - particularly the automotive, machinery and construction sectors, the chamber said.
The chamber also called on the EU to uphold multilateral trade principles and to refrain from taking further steps that could escalate trade restrictions. ■