By Marília Borges & Milos Labovic
For anyone outside international trade lawyers’ bubble, terms like anti-dumping, subsidies, and safeguards can sound abstract or too technical, and truth be told, they are. But these so-called trade defence instruments (TDIs) are not just peculiar trade legal jargon, they are also becoming increasingly more used and dare we say it; weaponized.
Wanting (or hoping!) to keep you hooked to hear more about all TDIs, especially the most used, which is antidumping, we are going to start with our series with a blog on safeguards. But we will also let you know more about TDI’s in general.
About Trade Defense Instruments
Dating back to GATT 1947, these measures were designed as deviations, exceptions to the tariff liberalisation and other broader trade commitments made at that time, with the objective to balance out economic liberalisation with the right to legislate. TDIs are used by governments to shield domestic industries from what they view as unfair competition or, in the case of safeguards, an impactful economic emergency such as sudden import surges.
As global uncertainty grows and trade flows shift, governments are quick to reach for their legal arsenal. The EU’s latest Trade Defence Report makes this clear: 2024 beat a record number of investigations, with 33 new investigations, nearly triple the usual annual average of 12 and the highest number since 2006. Just to give some more data, the EU has 192 definitive measures in place, 162 anti-dumping measures, 29 anti-subsidy measures, and just 1 safeguard measure; Steel. More on that later.
All three trade defence instruments find their base in the old and current GATT and WTO multilateral trade agreements. Each of them has its own separate agreement. And as with any WTO agreement, the EU had to incorporate them into its legal framework.
Safeguards
Safeguards are temporary measures applied to all countries, traditionally taking the form of additional import duties or quantitative restrictions applied when, due to unforeseen developments, a country faces a sudden increase in imports of a certain product that threatens or causes serious injury to domestic production.
What EU is currently applying to steel
The EU has only one safeguard measure applied to imports of certain steel products. Back to 2018, when Trump imposed the first steel tariff measures, there was a clear risk that third-country steel, shut out of the US market, would be diverted to the EU and flood the European market. In response, the EU imposed a broad safeguard on multiple steel categories.
Currently, depending on the category of steel, the EU introduces a certain limit or quantitative restriction of the product that can be imported. If that limit is reached, everything above that is subject to an additional 25% tariff rate. The system has been reviewed and extended several times and is due to expire in June 2026, in line with the eight-year WTO limit.
Now, we can say that 2025 is shaping up to be a year of trade-related surprises. The EU’s steel safeguard measures certainly have not emerged unscathed. In October, the European Commission proposed a successor arrangement, not as a temporary safeguard, but as a permanent Regulation. This new system of tariff-rate quotas (TRQs) for steel products aims, among other objectives, to further reduce tariff-free quota volumes and increase out-of-quota tariffs by 50%.
The file needs to go through the EU’s ordinary legislative procedure. Recently, the INTA Committee of the European Parliament has issued its draft report.
The EU has only one safeguard measure applied to imports of certain steel products. After the US introduced its own tariffs, there was a clear risk that third-country steel, shut out of the US market, would be diverted to the EU and flood the European market. In response, the EU imposed a broad safeguard on multiple steel categories.
The system has been reviewed and extended several times and is now due to expire in June 2026, in line with the eight-year WTO limit.
Overall, depending on the category of steel, the EU introduces a certain limit or quantitative restriction of the product that can be imported. If that limit is reached, everything above that is subject to an additional 25% tariff rate.
Conditions necessary to have the measure in place
For a safeguard measure to be imposed, three cumulative conditions must be met:
- A surge in imports as a result of unforeseen developments.
- The existence of a threat of serious injury, or actual serious injury, to the domestic industry.
- A causal link between the increase in imports and the injury or threat of injury.
In its investigations, the European Commission assesses a wide range of factors, including the volume and price of imports, the impact on the EU industry’s market share, capacity utilisation, production, prices, profitability, and other relevant indicators.
The rationale behind the EU steel safeguard
(a) Overcapacity in the steel industry, especially from China, ricochets also to third country markets, resulting in a persistent high volume of imports by the EU.
(b) Trade diversion to the EU based on other third countries measures, including implication of Section 232 by the USA.
(c) persistent injury to the domestic industry due to the factors mentioned above, causing for example decrease in production and domestic sales.
How is the decision-making taking place
Firstly, the industries do not have the power to initiate a case or send a complaint directly to the EU Commission. Instead, they must secure the support of EU Member States, which then present the case to the Commission. Making noise back home is paramount. The Commission also has the authority to launch an investigation on its own initiative. Thus working through European Associations is the go-to method there. The rol Euroferr in the case of European Steel is a case point.
Following an investigation, the Commission submits its findings to the Committee on Safeguards, composed of representatives from all Member States. For a safeguard measure to be adopted, it must secure a qualified majority: at least 55% of the Member States representing at least 65% of the EU population must vote in favour, or a qualified majority as you know it. .