The US and EU Tighten Conditions to Protect the Steel Sector

The 25% protection measure that the US has implemented for the steel sector, applicable to all countries, has been raised to 50% and stated to be non-reducible except in exceptional cases, allowing for a significant relief in the US steel sector. The steps taken by the European Union, which cites this application as justification, have also resulted in increased effects of protectionist approaches worldwide.

The latest agreements reached between the EU and the US contain signs that the parties will mutually reduce tax rates to 15% and follow a joint protection policy.

Canada's announcement of implementing a protection measure on a new different steel product exported to Canada, suspecting that other countries are exporting steel to the US through Canada and requiring proof that steel products are produced in Canada, serves as an example of the spread of this trend.

The protection measures taken lead to a greater concentration of countries like Turkey, which have not yet implemented effective protection measures due to restrictions in buyer countries, especially in Eastern countries such as Russia and China. It appears that the People's Republic of China generally tends to maintain exports "as far as they go." Similarly, the fact that exports from Russia to Turkey under the inward processing regime (DİR) reached up to 96.7% of total steel exports in the first half of the year also expresses a similar trend. It seems that the protection measure and anti-dumping tax decisions taken for the import of wire rod and flat hot products can be circumvented through DİR. This situation presents a disturbing image, suggesting that measures implemented by one unit of the Ministry are being circumvented by another unit.

No justification, no argument can rationalize the transformation of the Inward Processing Regime into a structure that empties the Turkish economy. At the point we have reached today, Turkey has an infrastructure capable of reducing steel imports to minimal levels, with a capacity of 60 million tons and the ability to produce almost all products to international standards. There are no examples in any country in the world where, despite having such capabilities, imports approach 50% of domestic consumption. This is because the steel sector is considered a strategic sector. It is seen as the foundation of the industry and construction sector. The notion that attempting to meet the demand for steel products through imports can be regarded as a threat to national security has also been upheld by courts in the United States. In this context, the fact that Turkey reached an import level of 9.3 million tons in just 6 months this year, despite a capacity increase of 10 million tons achieved over the last five years and protection measures, creates discomfort.

This situation also results in consequences reflected in Turkey's total foreign trade. The recent trade deficit observed in our foreign trade has the potential to negatively affect the success of measures regarding economic vulnerability. Given Turkey's structure, transitioning to a net steel exporter position, although there is a general trend of excluding steel products from Free Trade Agreements, the recent increase in signing agreements that include "Korel Tariff" or steel products gives the impression that it is not being considered to achieve a net exporter status in our foreign trade with countries like Cyprus and Egypt. While the import policies of Gulf countries regarding steel products are shaped based on common economic strategies and competitiveness, unfair competition practices in the steel sector are not allowed.