Why sharp decrease in Ukraine’s quota won’t help European steel industry

The EU’s move to tighten the TRQ regime is driven by mounting import pressure on the steel market. That concern is clear. In particular, in 2025, total steel imports, including semi-finished products, rose by 14% year over year. The overall tightening parameters are substantial, with tariff-free quotas cut by about 47% versus the current safeguard regime and the out-of-quota duty increased from 25% to 50% as of July 2026. What remains difficult to understand, is how this logic fits with the proposed quota for Ukraine, which would be set 73% below the country’s actual shipments last year.

The EU’s own safeguard framework, set out in Commission Implementing Regulation (EU) 2019/159, was built around balance. The Commission stated that safeguard measures should prevent serious injury while preserving traditional trade flows to the EU market. The regulation also provides for reviews in cases when measures risk harming integration objectives with preferential trading partners, including their stabilization or economic development.

Ukraine sits exactly at that intersection. It is not merely another distant supplier seeking access to the EU market. The EU and Ukraine signed an Association Agreement, including the Deep and Comprehensive Free Trade Area, to deepen political ties, expand free trade, and support closer economic integration. Steel policy should therefore be viewed first of all in this legal and strategic context.

The scale of Ukraine’s presence also matters. In 2025, Ukrainian steel accounted for only 1.9% of EU flat-rolled consumption and 1.6% of long-rolled consumption. These shares are too small to influence prices or supply conditions in the EU market. Ukraine doesn’t have the price power associated with market distortion as the country has lost its former low-cost position. Energy disruptions, logistics constraints, and rising production costs have been weakening the competitiveness of Ukrainian steel producers. Now they cannot influence the European market either through dumping-scale volumes or through a sustained low-price strategy.

If the EU seeks to restore 2013 import patterns, cutting Ukraine’s quota runs directly against that objective. Ukraine’s share of the European market for finished steel products reached 1.7% in 2025, close to its 2013 level (1.6%) and its 2021 level (1.8%). So, there is no market-based necessity to reduce Ukraine’s access to the EU market.

Moreover, Ukraine’s exports to the EU have fallen by 30% compared with the pre-war period. Ukraine’s steelmaking capacity fell by 81% between 2013 and 2025, while the number of steelmaking plants was cut in half. In 2025, capacity utilization was already about 92.5%, leaving no room for a surge in output. So, Ukraine cannot be treated as a source of overcapacity or import-related pressure.

Exempting Ukraine from a tightened TRQ would not undermine the effectiveness of the measure. By contrast, tightening the TRQ against Ukraine would lead to significant economic losses for supplier that is not the cause of the market distortion. The proposed quota of 713 ths tonnes would imply losses about 1.9 mln tonnes in exports of finished steel products and up to $1.2 bln in export revenue for Ukraine. That would be a severe economic shock. In practice, the tighter TRQ for Ukraine would cause major damage to an important trade partner while adding little to the stabilization of the European steel market.

The EU has a legitimate interest in protecting its steel market, and European producers need support to stay competitive at home and abroad. But effective trade measures must be targeted at the sources of disruption without undermining broader strategic goals. Ukrainian steel is not driving the distortion which the EU is trying to address. On the contrary, Ukraine and the EU steel sector face similar pressures: high energy costs, rising imports, and the costly green transition. The right response is therefore to avoid erecting new barriers against Ukraine and to preserve a trading framework that reflects market realities and the logic of EU-Ukraine integration.

Strengthening Europe’s steel policy should take into account Ukraine’s steel industry, which is already part of European supply chains. If the EU is serious about building a stronger, more resilient and more competitive industrial base, Ukraine should be treated as a partner in that effort. The real test of Europe’s steel policy is not only whether it protects the market today, but whether it strengthens the foundations of a more integrated European steel industry for the future.