Why EU's new rules threaten Ukrainian steel and how to reach a compromise

Iron and steel products are Ukraine’s second most valuable export category after agricultural goods. Since the start of the full-scale war, the European Union has become the key destination for Ukrainian metal exports.

That is why access to this market is of utmost importance. And Ukrainian exporters may soon face major problems there.

New rules proposed by the European Commission would sharply worsen market access conditions for importers. So far, it remains unclear what decision will ultimately be made regarding Ukraine.

Read more about the issue and possible scenarios in the article by Veronika Movchan of the Institute for Economic Research and Policy Consulting: Awaiting EU's verdict: why Ukrainian metal exports to Europe are under threat.

In 2025, the administration of Donald Trump increased global tariffs on steel from 25% to 50%, creating a new wave of trade diversion in global steel markets.

As a result, pressure has also increased on the European Union.

At the end of 2025, the European Commission presented a proposal for new steel import regulations that are expected to take effect on July 1, 2026, effectively replacing the current safeguard measures.

According to Brussels, the new regulation is intended to counter the trade-related negative impact of global steel overcapacity on the EU market.

The proposal includes a 47% reduction in the total tariff-rate quota, down to 18.3 million tons per year, as well as an increase in out-of-quota import duties from 25% to 50%.

It also introduces new "melted and poured" requirements aimed at improving product traceability.

At the same time, it is still unclear which countries the regulation will apply to.

The current proposal explicitly exempts only the countries of the European Economic Area - Norway, Iceland and Liechtenstein.

As for all other countries, the European Commission is expected to adopt a separate implementing act defining how tariff quotas will be distributed based on various criteria, including import structure and existing trade agreements.

Ukraine is not directly mentioned in the proposed regulation, but there is a very clear hint.

According to the proposal, "the Commission shall adopt implementing acts laying down the country allocation of the tariff quotas set out in Annex II taking into account the Union interest and to reflect the following elements: …the situation of a candidate country facing an exceptional and immediate security situation."

However, this reference appears in the article concerning the distribution of tariff quotas, not in Article 1bis, which defines the countries exempt from the regulation.

The suspension of EU safeguard measures for Ukraine, extended in 2025 until May 2028, does not apply in this case.

Therefore, by July, the European Commission will have to make a separate decision regarding Ukraine.

Several scenarios are possible. The best option would be for the new regulation not to apply to Ukraine at all.

The second most favourable scenario would be a suspension of the new regulation for Ukraine, similar to the current safeguard exemptions.

That would give Ukrainian exporters at least two more years without tariffs.

A third option would be for the European Commission to establish individual tariff quotas for Ukraine. Such a decision would effectively return market access conditions to the pre-May 2022 situation.

If none of these positive scenarios is chosen, Ukrainian producers would have to compete for the remaining unallocated tariff quotas. This would significantly increase the risk of facing the 50% tariff.

The EU’s new regulation therefore creates substantial risks for Ukrainian steel exporters and uncertainty still remains.