The European Union’s new steel tariff quota system: What it means for Northern Ireland

As part of its wider strategy to protect its domestic steel industry, the European Union (EU) has announced plans to replace its existing steel safeguard measures with a new tariff rate quota (TRQ) system. The proposed system would significantly restrict steel imports into the EU by lowering quota volumes and increasing tariffs on steel imported beyond those limits.

The move has sparked concern among steel-exporting countries, many of whom fear they could be hit hard by the new restrictions. Among them is the United Kingdom (UK), whose steel exports rely heavily on access to the EU market. But within the UK, Northern Ireland (NI) faces a particularly complex challenge because of its unique post-Brexit trading arrangements which are currently governed by the Windsor Framework.

Under the Windsor Framework, goods imported into Northern Ireland from Great Britain (GB) must pay EU tariffs unless it can be shown that the import qualifies for zero tariffs under the EU-UK TCA. Any significant increase in EU tariffs applicable to steel imports is, therefore, likely to adversely impact GB-NI trade.

This brief analysis explores how the EU’s proposed tariff quota system might affect Northern Ireland’s ability to import steel from GB and why NI should become the focal point of the discussion.

The current steel safeguard regime

The current EU steel safeguard measure is intended to temporarily shield EU steel producers from rising imports and is due to expire in June 2026. It combines country-specific quotas for major steel exporters and a residual quota that applies to all non-EU countries. Steel imported within these quotas can enter the EU tariff-free. However, once a quota is exhausted, imports face a 25% tariff.

The UK currently benefits from a country-specific quota. This system created problems for NI because initially NI could not use the UK quota for GB steel moved into NI. This was because EU tariff rate quotas only apply to goods released into free circulation in the EU. This meant that steel imported directly from GB into NI would not qualify for in-quota no-tariff treatment. It led to a situation where GB and NI businesses had to rely exclusively on the residual quota to import steel originating from GB, meaning fewer steel imports could access NI on a tariff-free basis.

To address this problem, the EU and the UK agreed that UK-originating steel could be brought into NI under the UK quota. This solution applied specifically to certain steel products that the UK was able to demonstrate were being moved in great quantities from GB into NI.

The new system and its potential impact on NI

The EU now intends to remove the steel safeguard and replace it with a permanent and more restrictive TRQ system. The quota would be reduced by 47%, whilst the out-of-quota tariff would be doubled from 25% to 50%. The reduction of the quota, combined with the significant hike in tariff levels, means that the amount of steel that can be moved from GB to NI will inevitably fall.

But there’s more…

Under the current proposals there are no guarantees that the UK would maintain its country-specific quota. There has been some speculation that, as the UK is not a major exporter of steel, the European Commission might remove the UK’s individual allocation.

If that happens, NI would once again be left relying solely on the much-reduced residual quota - making it even harder for NI businesses to import GB steel tariff-free.

The European Commission has signalled it will carry out these changes via the tariff schedule modification procedure under WTO law. Under this procedure any change of tariff commitment is subject to negotiation and may require an offer of compensation to WTO members adversely affected by the change. What happens to the UK’s country-specific quota is something that will have to be resolved in the context of those negotiations.

Another key change is the introduction of a stricter “melt and pour” rule of origin. Currently, steel that undergoes significant transformation (such as processing or refining) in an exporting country can qualify as originating from that country for the purposes of the TRQ.

Under the new proposal, however, the origin of steel would be determined by identifying where the steel was initially melted—even if it was further processed elsewhere. This stricter rule may mean that fewer steel products may qualify as “originating” and therefore enter tariff-free within quota limits. For NI, this could limit the range of GB steel eligible for in-quota treatment, further tightening supply and increasing costs.