Between Quotas and Tariffs: Will the European Market Close to Ukrainian Steel Products?
25 May 11:15
ANALYSIS FROM 
Ukrainian officials are engaged in difficult negotiations with representatives of the European Commission, seeking to agree on the most favorable terms for steel imports from Ukraine. These negotiations are taking place under time pressure, as the updated EU safeguard regulation is set to take effect on July 1."Komersant Ukrainian" investigated what the outcome of these negotiations could and should be.
In early June 2025, the European Union, confirming its readiness to support Ukraine’s economy amid the war, extended the suspension of safeguard measures on iron and steel imports from Ukraine for three years—until the summer of 2028. However, neither this decision nor the Association Agreement between Ukraine and the EU, along with Ukraine’s status as a candidate for EU membership, proved sufficient arguments to prevent the extension of new steel import quotas to Ukraine. It is said that WTO rules stipulate that such restrictions must apply to all of the EU’s trading partners. And last week, the European Parliament approved new measures to protect the EU steel market. The new regulation still needs to be officially approved by the European Council.
A Special Partnership
Ukraine is on the radar both in Brussels, where the European Commission is based, and in Strasbourg, where the European Parliament sits. But not always in the way Ukrainian partners would like. Ukraine did not receive sufficient support last year when it requested a postponement of the introduction of the CBAM, i.e., the carbon tax, due to force majeure military circumstances. And now, a new test for the special partnership between Ukraine and the EU.
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Karin Karlsbro, Vice-Chair of the European Parliament’s Committee on International Trade and chief negotiator on the quota issue, visited Ukraine last week and toured metallurgical plants to, as she put it, “see the real picture.” Speaking during a debate on the introduction of a new, even stricter steel trade regime with other countries, she addressed her colleagues with the following message:
“Ukraine should not be punished by EU measures while its steel industry is under direct attack by Russia. Ukraine is not a source of global excess capacity. We must treat them as a future EU member and strategic partner, and the EU must now fulfill its promise that Ukraine will receive special status under the new regulation.”
But whether her colleagues heard this appeal—that is the question. It is up to the European Commission to determine which country should receive which steel import quota. Andriy Tarasenko, chief analyst at the GMK Center, explains.
“There is no decision yet; negotiations are underway between representatives of Ukraine and the European Commission. And a serious battle is unfolding over who can supply what and how much. Ukraine is in the group of partner countries with which individual negotiations must be conducted. These are key partners that have free trade agreements with the EU. There aren’t many of them. First and foremost, these are Japan, South Korea, Turkey, Ukraine, Serbia, and Vietnam,” the expert notes.
The first round of negotiations, by all accounts, did not go very well for the Ukrainian side. At least, as the Financial Times reported, citing Ukrainian officials, at the initial stage of negotiations, European Commission representatives proposed applying a duty-free bilateral quota of 713,000 tons for steel exports from Ukraine. And this despite the fact that in 2025, Ukraine supplied 2.65 million tons of steel products to the EU. In other words, Ukraine is being offered the opportunity to export a volume 70 percent smaller duty-free. “And where is the preferential approach here?” wonders Andriy Tarasenko, continuing:
“Everyone expected, if not an exemption for Ukraine from the quotas, then at least some concessions regarding the volume of these quotas. But according to some sources, the European Commission’s position turned out to be unexpectedly tough. And this is despite the fact that Ukraine has an Association Agreement; we hope to receive some kind of accelerated membership plan, but economically, it turns out that the European Union is signaling a disconnection of our trade. This is surprising. We can only hope for the common sense of our European partners.”
This European approach surprises Andriy Tarasenko also because Ukrainian steel imports pose no threat to the European market.
“Ukraine’s share of the EU market ranges from 1.5% to 1.8%. For flat steel, it’s 1.8%; for long steel, it’s 1.5%. Exports from China are a completely different matter. Chinese products enter the European market indirectly through the markets of Indonesia, Malaysia, Vietnam, and Taiwan. Imports from these Asian countries put significant pressure on prices in Europe in 2025. Yet the decision to restrict trade applies to everyone,” the expert notes.
In his opinion, with such approaches, Ukraine could suffer much more than other exporters.
The Impact of Quotas
All four Ukrainian steel producers—Zaporizhstal, ArcelorMittal Kryvyi Rih, Kametstal, and Interpipe—could feel the full force of the new quota blow. As Andriy Tarasenko, chief analyst at GMK Center, emphasizes, for Ukrainian steelmakers, the European Union is currently virtually the only export market.
“Ukrainian exports of long steel products depend on the EU market by 93%, and for flat steel, it’s also around 90%. And under these circumstances, there is a prospect of our exports being limited by 70%,” the expert notes.
Here is how Oleg Krykavsky, Director of Government Relations at ArcelorMittal Kryvyi Rih, assesses the immediate production outlook :
“In 2025, thanks to a decision adopted in June 2025 regarding three years of barrier-free trade with the EU, we were able to increase our exports to the European Union and ship 850,000 tons of steel products there. For this year, we planned to increase exports by essentially 50 percent—to 1.25 million tons. “But, primarily due to the SVAM, the new quotas expected to take effect on July 1, and rising electricity prices, it appears we will have to abandon these plans,” the expert notes.
Another significant factor is that the European Commission has effectively already delayed its decision on the updated quotas. And this delay in the decision, along with the uncertainty regarding the specific quota amounts, is negatively impacting trade. Andriy Tarasenko, chief analyst at GMK Center, draws attention to this.
“Usually, steel product deliveries are contracted in advance. But now, for example, how is a steel mill supposed to plan its sales and production capacity when the buyer will deal with it without knowing how much the company can actually supply—100,000 tons or half a million tons, as was the case last year. And if supplies, for example, exceed the quota, that means an additional 50% duty. In other words, negotiating supplies for the third quarter right now makes no sense, since the decision on the quota size hasn’t been made,” the expert believes.
He notes that European Commission officials are conducting similar negotiations not only with Ukraine but also with representatives of other countries. And given how difficult it is to agree on quota positions, according to Andriy Tarasenko, it is unlikely that a final decision will be reached before the second half of June. This is already creating additional problems for the supply of Ukrainian steel products to EU countries.
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