United States Trade Representative Robert Lighthizer confirmed on Thursday that import tariffs for steel and aluminium from the EU, Brazil, Argentina and South Korea will be put on hold temporarily while negotiations continue between the US and those countries and regions.

“The announcement that the EU will be given a temporary exemption will be greeted with an enormous sigh of relief from the sector, and it provides us with breathing room to find a more permanent solution,” UK Steel director Gareth Stace said.

“With some 350,000 tonnes of steel sold to the US [by enterprises in the UK] last year, [equivalent to] 7% of our total exports, it is clear that any tariffs would ultimately hit the [UK steel] sector hard,” he added.

But gaining temporary exemption from the US trade defense measures will do nothing to stop the European steel markets being flooded with excess material – and could even worsen the situation, according to Stace.

“The tariffs are set to divert millions of tonnes of steel away from the US toward other open markets,” he said. “At 40 million tonnes per year, the EU is by far the largest import market in the world, and will be the obvious [new] target for major steel exporters to the US such as Turkey and Russia.”

Turkish and Russian steel export volumes to the EU grew by 65% between 2013 and 2017, and the first two months of this year alone saw a further 12% increase, according to Stace.

The US imported 1.98 million tonnes of steel from Turkey in 2017, with cold-rolled coil (CRC), hot-dipped galvanized coil (HDG) and rebar taking significant shares of that volume.

European market sources believe that US coil buyers will be forced to continue buying material from countries such as Turkey and Japan whose imports will be subject to the tariffs, due to the lack of local replacement material. But EU sources told Metal Bulletin this week that more Turkish rebar could still enter the European markets.

To avoid injury to European steel producers from excessive steel volumes in their home markets, more trade defense measures are needed in the region, Stace said.

“The top priority here must be for the European Commission to swiftly introduce safeguard measures to protect against further expected import surges. Crucially, these measures must cover the same product range as the US tariffs,” he said.

“It is vital that we do not leave large segments of the [steel] sector exposed,” he added, “and scupper the sector’s fragile and nascent recovery from the crisis of recent years.”