Imports of steel and electronic goods from China into the EU are closely monitored by the European Commission. Such vigilance follows the imminent imposition of US and Chinese tariffs, which may redirect Chinese exports to Europe. EU Commission officials have called this shift in trade flows a “dynamic” situation.
Goods Could Be Diverted to the European Union
As the U.S. started to apply higher tariffs on goods produced in China, the European Commission has said that they anticipate goods originally intended for the U.S. to “find its way” into the EU. A senior EU official prophesied “trade diversion, whereby some countries who can no longer send their goods to the US will hunt for alternative markets.” The official also emphasized the EU’s determination to protect its market: “Of course we will be ready to defend our market, we are not going to absorb whatever volume and whatever quantity.”
Steel Sector Faces Growing Pressure
There is particular focus on Chinese steel exports. But after Washington imposed cumulative tariffs of 54% on US imports Wednesday, analysts are concerned that Chinese steel production surplus could also be diverted into EU-markets, aggravated by demand from China itself slowing in its own construction industry. “Steel has no place to go to in China and it’s being diverted into the European market,” the senior EU official confirmed. You may also wish to note that already they’ve been 25% tariffs on Chinese and EU steel since mid-March. OECD figures as of 1 April forecast worldwide excess steelmaking capacity to grow from a projected 602 million tonnes in 2024 to 721 million tonnes by 2027. Eurofer’s surplus capacity projection amounts to more than five times the steel output of the European bloc.
The same is true for electronics and renewable energy items.
Steel will be the last, the European Commission expects, but other types of Chinese goods may also seek new ways into the EU market. “The electronic devices and the renewables, such as solar panels or wind turbines, is another risk for the EU,” Alicia García Herrero, a Bruegel think tank expert, told Euronews. She also noted that electric vehicles, which have been included on the EU tariff list since November 2024, are among the products that could meet problems of overcapacity.
Commissions to Increase Oversight of the Market
The European Commission will also have to monitor for US retaliatory tariffs on China and other countries when they go into effect on April 5 and April 9. It is a preventive step aimed at identifying and addressing any sudden rise in imports that may threaten EU industries.
Protections being in place
The EU official recalled the experience from the steel sector, where Chinese imports effectively lost access to the US market in 2017, leading to the imposition of some safeguard measures. A trigger — permitted by World Trade Organization (WTO) rules — enabling a country to suspend imports of specific products that enter a given market too quickly and in too significant a quantity. “We have that for some time for steel,” the official said. “It’s hard to say whether we will require it for other industries. We are looking closely.” These schemes are used by the EU as a tool to protect its domestic sectors against the potentially negative impact of trade diversions.
