ANKARA: The EU has announced that it will impose tariffs on hot-rolled iron and steel products from Turkey starting on Jan. 8 following an anti-dumping investigation.
Turkey was once the top provider of finished steel products into Europe until the EU introduced safeguards in 2018 to protect manufacturers.
A complaint that was lodged by the European steel association EUROFER on March 31 last year over the low pricing of Turkish hot-rolled coil imports into the EU resulted in a probe that was launched in May.
The complaint contained sufficient evidence of dumping and the resulting economic damage.
A separate anti-subsidy investigation against Turkish iron and steel products is also ongoing.
The new tariffs that were announced by the EU on Turkish products vary between 4.8 percent and 7.6 percent. They will target companies including Erdemir, Isdemir, Colakoglu Metalurji and Borcelik Habas, and will be applied for six months until the investigation concludes.
Istanbul-based Erdemir Group is Turkey’s largest integrated steel producer.
But the higher duties are expected to lower the profit margins of Turkish companies and discourage them from competition in Europe.
According to the complaint, Turkish exporters increased their market share from 2.8 percent to 8.1 percent in 2019 by undercutting established market prices.
Last year, Turkey exported about $3 billion of hot-rolled steel to the EU, according to data from Turkey’s Steel Exporters’ Association.
BACKGROUND
Aydin Sezer, an expert on customs policy, says the European move ‘is not politically motivated and only aims to compensate for Turkish product dumping last year.’
According to Aydin Sezer, an expert on customs policy, the European move is “not politically motivated” and only aims to compensate for Turkish product dumping last year.
“It has technical and judicial basis. It will not prevent foreign trade with European countries, but it will make it more costly and could limit Turkish mill exports to a certain extent,” he told Arab News.
Sezer said that the decision will allow Brussels to discipline Turkish players and protect against potential dumping attempts.
Last May, Turkey informed the World Trade Organization that it could inflict customs duties on steel imports from the EU in retaliation.
Trade authorities in Ankara have yet to release a statement on how Turkey will respond to the EU decision.
In 2018, the US raised tariffs by up to 50 percent on steel imports from Turkey, citing national security reasons, causing major losses for Turkish steel exporters and pushing Ankara to retaliate by applying equal tariffs on some imported products from the US.
Last year, the coronavirus pandemic hit several industrial sectors in Turkey, including the steel sector, which halted production in April, resulting in a sharp drop in the country’s crude steel output. Turkey’s construction sector, normally the largest steel-using industry in the country, is expected to contract further.
Rising EU protectionist measures in Turkey’s main export market have also worsened the domestic steel market outlook.
Turkey’s steel sector, vulnerable to exchange rate fluctuations and variations in global trade patterns, is mainly dependent on steel product exports and normally exports 50 percent of its total output each year.
