New EU steel quotas are a crippling hit to Ukrainian industry

Ukraine's tariff-free steel exports to the EU are set to be severely limited by new global quota allocations announced by the European Commission on June 30, potentially by more than 50% less than the quantity shipped to the bloc in 2025.

The EU's new steel allocation, set to enter into force on July 1, was introduced in response to global steel overcapacity, which has been hurting EU producers. The measure aims to restrict tariff-free steel imports to 18.3 million metric tons per year, a 47% reduction. Anything imported over that threshold would be subject to a 50% tariff.

However, the European Parliament and EU countries agreed that Ukraine should receive special treatment to prevent it from being hurt in the crossfire.

In 2024, the last year used to inform the EU's benchmarking for quota allocation, Ukraine exported 2.215 million metric tons of finished steel to the bloc, according to a report from the steel industry association Eurofer.

Steel exports from Ukraine rose 8% in 2025 compared with the year before, according to a separate report by Eurofer.

The country-specific quotas the EU has allocated to Ukraine total only 1.05 million metric tons per year, accounting for less than half of Ukraine's 2024 steel trade.  

But a senior EU official said the change will cover 70% of Ukraine's historic trade flows, leaving it proportionally better off than the average 47% worldwide reduction, yet still affecting 30% of Ukraine's current steel trade.

The reason they note a much higher number is that Ukraine can also tap into a second quota allocation, one that other countries can tap as well, which means Ukraine securing a sizeable share of it is far from certain.

Some of those other countries allowed to tap into that second quota allocation have larger and more competitive steel industries than Ukraine's, such as India and Turkey.

According to a European Commission press release, a "significant number of the EU's FTA partners have agreed in principle to their tariff quota allocation."

The Kyiv Independent was unable to confirm before publication whether Ukraine had agreed to its proposed allocation.

The EU's allocation of steel quotas is set to coincide with a similar change from the U.K. But the British announcement says its new restrictions will not apply to Ukraine.

Instead, the Ukrainian steel trade is underpinned by the U.K.-Ukraine trade agreement, which envisages 0% tariffs on Ukrainian steel from 2026.

However, the EU is by far the largest market for Ukrainian steel, accounting for 79% of total exports.