Brazil criticizes EU steel restrictions and seeks compensation for new tariffs

Brazil criticized the new restrictions on steel imports enacted by the European Union (EU), saying the measures will reduce access to the European market and fail to address the root cause of global steel overcapacity.

In a joint statement, Brazil’s Foreign Ministry and Ministry of Development, Industry, Trade and Services said the EU decision adds new barriers to exports and affects trading partners that are not responsible for the global supply glut.

According to the Brazilian government, the EU has introduced new quantitative restrictions on steel products and raised tariffs on imports that exceed the established quotas.

Brazil argues that the new rules will affect most of the bloc’s trading partners, even after the end of the safeguard system adopted in 2018. The government says the new model leaves less room for traditional exporters and creates an additional barrier to international steel trade.

Brazil also said it is affected by global steel overcapacity and will continue to defend multilateral solutions in international forums. In the government’s view, restricting trade from countries that did not cause the oversupply does not correct the distortion and could encourage a new wave of trade defense measures.

The statement also said Brazil and the EU did not reach an agreement on compensation for the new tariffs, as provided for under Article XXVIII of the General Agreement on Tariffs and Trade. Brazil said the new quota system is a unilateral measure and cannot be treated as compensation for the country.

Despite the disagreement, the government said it will continue negotiating with the European Union in search of a solution acceptable to both sides.

Recent data obtained by Datamar shows that Brazilian exports of steel products to the European Union rose 47.4% in May 2026 from a year earlier. However, in the cumulative January-May period, exports fell 0.9% from the same period last year. The chart below compares export volumes over the past few years:

Steel Product Exports to the European Union | Jan-May | 2023-2026 | TEUs

Source: DataLiner (click here to request a demo)

New quotas and 50% tariff

The European Commission announced that the volume of steel allowed into the bloc tariff-free will be cut by 47%, to 18.3 million tonnes per year. Imports above that limit will face a 50% tariff across 26 categories of steel products.

In practice, exporters will be able to sell less steel to the EU without additional costs and will face a higher tariff if they exceed the quota. Under the previous system, imports above the established limits were subject to a 25% tariff.

Half of the quotas will be reserved for countries that have free trade agreements with the European Union. The other half will be available to other trading partners, while some countries will receive specific limits based on their export history.

The new restrictions replace the EU steel safeguard system introduced in 2018. The new framework nearly halves the tariff-free volume and doubles the duty applied to imports above the quota.

EU cites global steel overcapacity

The European Commission says the changes are intended to protect the bloc’s steel industry from global overcapacity, which has increased supply and put pressure on international prices.

The Commission also cited dumping practices and said the measures are designed to raise capacity utilization at European steelmakers to about 80%, from the current 65%.

According to the Commission, the new rules are needed to contain the effects of global oversupply and strengthen the EU steel industry, which has lost about 100,000 jobs since 2008.

In 2025, the main steel suppliers to the European Union were Turkey, South Korea, Indonesia, China, India, Ukraine and Taiwan.

For Brazil, however, the EU’s new steel restrictions raise concerns over market access, trade predictability and the treatment of suppliers that are not at the center of the global overcapacity problem. Brazil’s position also points to the risk of rising trade tensions in a sector already marked by tariffs, quotas and trade defense measures across several markets.

Source: Agência Brasil

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