EU steel regulation threatens Vietnam's steel exports

The European Commission has opened a consultation on the EU's new steel regulation, aiming to tighten protectionist measures. The draft rules would cut the tariff‑free import quota to 18.3 million tonnes per year, raise the over‑quota duty to 50 % and expand the product scope from 28 to 30 categories. A key new requirement, the “melt‑and‑pour” rule, would force importers to identify the country where steel is first melted and cast, not just where it is finished.

Four groups of products are under review – cast‑iron pipes, various steel wires, stainless‑steel wire and forged bars – with the consultation running until 30 September 2026 and results due by 31 December 2026. For Vietnam, the changes pose two linked challenges. Export volumes to the EU fell about 18 % and values 23 % in early 2026, already reflecting weaker demand and tighter EU safeguards. The melt‑and‑pour rule could further limit Vietnamese‑processed steel because quota allocation would be based on the origin of the raw material, potentially excluding “made in Vietnam” products that use imported billets or hot‑rolled coils. The Vietnam Steel Association projects raw steel output of 27 million tonnes in 2026, finished steel of 33 million tonnes and exports of roughly 6 million tonnes, underscoring the sector’s exposure to the forthcoming EU measures.