The European Union has launched an investigation to assess whether US tariffs have led to a surge of cheap aluminum products flooding into the EU, thus impacting local industries. EU producers are concerned that the tariffs imposed by the Trump administration on metals could result in an influx of cheap Chinese aluminum products into the European market.
The investigation by the EU will cover all trading partners and may potentially lead to higher import tariffs. In order to secure the local metal supply chain, the EU is also considering imposing tariffs on scrap metal exports to support local industries.
Last week, US President Trump raised import tariffs on steel and aluminum to 25%, prompting the EU to announce retaliatory tariffs on US goods worth $28 billion.
The EU has already implemented protective measures for steel, including import quotas, and launched an investigation into alloy products in December last year.
However, the steel and aluminum industries in Europe have been calling for more actions to prevent global market oversupply, especially from metal dumping from China. With Trump’s tariffs in effect, it is expected that more metal will flow into Europe, further exacerbating the situation.
Draft documents point out, “In the past decade, EU producers have lost a significant amount of market share. Furthermore, since 2021, around 50% of primary production capacity remains idle.”
The documents further state, “The recent announcement by the US to impose tariffs on aluminum products may further worsen the EU market situation and bring significant risks of trade diversion from multiple countries.”
The European Commission plans to propose new steel trade measures in the third quarter of this year, based on a “tariff quota system”, to replace the current measures set to expire on July 1, 2026.
To prevent China and other countries from using “transshipment trade” to evade tariffs, the European Commission will implement the “Melted and Poured Rule”. This rule will prevent importers from changing the origin through “minimal processing” to avoid EU tariffs.
Since the full-scale invasion of Ukraine by Moscow in 2022, EU imports of Russian aluminum have continued to decline, accounting for only 6% of total imports last year. The EU decided last month to gradually phase out Russian aluminum imports by 2026 and expand the tariff range that previously applied only to certain imported products.
Additionally, the European Commission plans to impose reciprocal bans on countries that restrict scrap metal exports to the EU. In recent years, EU exports of scrap steel have more than doubled, accounting for 20% of steel production, causing European steel manufacturers to struggle to obtain sufficient raw materials.