The EU Launches Inquiry into Aluminium Imports Following US Tariffs
The European Union (EU) is set to initiate an investigation into its aluminium market in a bid to safeguard its industry from the influx of low-cost imports, a situation exacerbated by recent tariffs imposed by former US President Donald Trump.
Overview of the Investigation
On Wednesday, the European Commission will formally announce the investigation aimed at assessing the significant rise in aluminium imports from various countries. Should the probe confirm this surge, Brussels is prepared to implement countermeasures to protect local producers.
Impact of US Tariffs
The investigation is a response to the 25% tariffs on aluminium that the United States recently implemented, which are expected to further destabilize a sector already challenged by high energy costs, reduced demand, and an influx of inexpensive imports. The EU has indicated that it may retaliate against the US with tariffs affecting up to €26 billion worth of American goods.
Market Trends and Challenges
The EU Commission’s documents reveal concerns over what it describes as a “significant threat of trade diversion” due to the US tariffs. Domestic aluminium producers in the EU have lost considerable market share over the past decade.
Outside of Norway and Iceland, which are part of the European Economic Area and may be exempted, key exporters of aluminium to the EU include:
- United Arab Emirates
- Russia
- India
The EU has already committed to phasing out imports of Russian aluminium by the end of 2026.
EU’s Approach to Trade Defense
While the US has justified its tariffs on national security grounds, the EU is preparing to base its actions on established trade defense laws compliant with World Trade Organization (WTO) regulations. Potential safeguard measures may mirror those previously introduced for steel, where a 25% tariff was enacted on imports exceeding a designated quota.
Current State of the Aluminium and Steel Industries
The steel sector in the EU is experiencing the lowest production rates since record-keeping began, apart from during the pandemic. The Commission has warned that pressure on the industry will likely intensify as other countries erect tariff barriers to prevent Chinese metals, which are blocked by the US, from entering their markets. This could make the EU a major destination for global overcapacity in steel.
Measures on steel will be expanded, and the Commission is also considering actions against nations that impose restrictions on scrap metal exports to the EU.
Sustainable Solutions for the Future
The forthcoming metals action plan, reported by Table Media, aims to enhance protective measures under the upcoming carbon border tax, set to be implemented next year, while also pursuing initiatives to help the industry lower its carbon emissions.
Industry stakeholders have expressed concerns regarding investment capabilities in new technologies, such as hydrogen-fueled blast furnaces. It is estimated that the steel sector will need an annual investment of €14 billion until 2030 to achieve decarbonisation. However, many of these initiatives are deemed economically unfeasible under current conditions.
Future Support and Industry Advocacy
The Commission suggests that EU member states consider lowering energy taxes for heavy industries and increasing subsidies for hydrogen projects. Strategies will also be implemented to encourage the purchase of green steel, which often comes at a premium compared to traditional materials, by adjusting procurement rules to incorporate resilience and sustainability requirements for various industrial products.
While the EU Commission has not commented specifically on the proposed action plan, it has indicated that further details will outline additional priority actions tailored for the sector, alongside measures necessary to replace expiring trade defense safeguards post-June 2026.
