The EU needs action on Trade Defence now

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The EU needs action on Trade Defence now

European manufacturing is under extreme pressure from unfairly traded imports: state-controlled and export-driven economies, overcapacities in many sectors and in many countries, as well as imports that disregard EU environmental and social standards, create an uneven playing field, leaving European industries at a disadvantage.

The Draghi Report has highlighted the urgent need for a resilient and competitive European industry that aligns with Europe’s strategic interests1. The Report highlighted the gaps in the EU’s current trade defence mechanisms that need to be addressed. We need flesh on the Draghi bones.

In recent strategy papers, the European Commission seems to have recognised the need for a more effective trade defence toolbox, but it has not backed up these easy statements with effective action. In the meantime, world class, efficient and innovative EU industries are dying. AEGIS Europe has been calling for more action for many years.

In this paper we set out some of the actions needed.

• Changes to current practice

Allocation of additional human resources: There must be the immediate allocation of additional human resources to DG Trade. This will allow for more investigations into unfair practices, more time to understand and address changes in state-run trade strategies, more creative use of current instruments and to make proposals for legislative change.

A value chain approach: Investigations encompassing a whole supply chain: The Commission must initiate one or more simultaneous investigations covering the full value chain to address similar unfair trading practices at all levels of a value chain.

Duties on downstream products incorporating upstream products: Duties on incorporated products: the Commission must impose, as they do in the USA, measures not only on the upstream product itself but also on that part of the downstream product that is made up of the upstream product. This can be done by drafting the NOI sufficiently broadly.

Social and Environmental Costs in dumping calculations: Social and environmental costs are factored, by law, into the injury calculations. To avoid an unfair comparison between the dumping and the injury, they must be factored into the calculation of the dumping margin.

Better SMEs Support: The Commission must establish an office, not only to explain TDI but to actually assist sectors, dominated by Small and Medium Enterprises, in the filing of complaints and in the completion of the injury questionnaire.

Better monitoring of trade patterns: The Commission must improve the trade monitoring system with the obligation to advise industry and build cooperation with industry on ex-officio investigations.

More robust use of circumvention rules to address new forms of circumvention practices: Third-country exporting producers hit by trade defence measures, or the imposition of unilateral tariffs, are becoming more and more skilled and innovative to immediately circumvent the duties in place. Boosted by domestic subsidies, third-country exporting producers subject to duties, are engaging in “duty offshoring” practices, which consist in establishing a production presence, whether partial (through finishing operations) or total (through production) outside their home country (in the EU or outside the EU), in order to bypass a duty (tariff, anti dumping duty).

Duty offshoring practice is a practice for which there is insufficient due cause or economic justification other than the imposition of the duty, and for which there is evidence of dumping and injury and evidence that the remedial effects of the duty are being undermined in terms of the prices and/or quantities.

Third-country exporting producers subject to duties are also circumventing duties by adding an additional processing step to their products initially subject to duties to avoid the measures and export downstream products. This results in displacing the issue of unfair trading practices from Chinese exporters in the value chain, from upstream producers to downstream producers, equally affected by these systemic unfair trading practices.

When there is a change in the pattern of trade which consists in an increase of imports of a product immediately derived from products subject to anti-dumping duties and belonging to the same value chain, the Commission should qualify this practice as a new form of circumvention practices falling under Article 13(1) of the Basic Anti-Dumping Regulation.

More extensive use of particular market situation: Increasingly, an input from one country (often China) is exported at dumped or distorted prices into a second country (often another Asian country), which then exports a finished product to the EU at injurious prices. This is sometimes referred to as “input dumping”. The Commission should be more robust in finding a particular market situation (to adjust the distorted input from the first country) in such scenarios to enable the EU industry to have an effective remedy.

• Changes to the law

Improvement of the safeguard instrument: Reform the voting system in safeguards procedures: the current rule of a qualified majority voting only adds another obstacle to a procedure which already asks the concerned industries to meet very strict conditions. As done for the anti-dumping instrument, the voting rule should change in blocking a proposal from the Commission only if a qualified majority votes against the Commission’s proposal. Allowing the EU industry to file a safeguard complaint would also streamline the procedures – rather than having to provide the data via Member States.

Removal of the Lesser Duty Rule: In cases where the dumping margin is higher than the injury margin, and only in these cases, the simplest and most straightforward solution is to remove the need to make a comparison between the dumping margin and the injury margin. In other words, to remove the lesser duty rule. The lesser duty rule is not required by WTO law. It is a WTO + provision of EU law. There is nothing to prevent the Union from removing this requirement. The removal of the lesser duty rule must become the priority for EU policy makers, therefore, AEGIS Europe supports the reference to this important change in the Steel and Metals Action Plan. The lesser duty rule should be automatically not applied where there is evidence on the file of significant overcapacities in the countries of origin of the dumping.

A new instrument to deal with overcapacities: The Commission is proposing an overcapacities instrument for steel. The EU needs a similar instrument for other sectors: The instrument must allow for the imposition of punitive tariffs, or any equivalent measure, at the border, on goods sourced in third countries which have given support directly or indirectly to the rise of economically irrational overcapacities.

This instrument: i) must be available independent of the Safeguard instrument; ii) must result in measures made effective at the EU border; and iii) must be triggered by the EU industry (and not a Member State) to give the initiative to industry.

AEGIS Europe and Plastics Recyclers Europe call for swift and effective actions to secure the future of EU industry

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Brussels, 29 October 2025. As the European Union faces growing global competition, European producers already face several trade challenges, including high production costs (especially energy), global overcapacities, and aggressive third-country industrial policies.

Market performance indicators reveal a decline in competitiveness in the last ten years. This is evident in reduced production across sectors such as steel, silicon, ferroalloys, aluminium, and paper & board. Additionally, exports have dropped significantly in sectors like finished steel, man made fibres, and paper & board. Increased energy prices also play a role, but the real problem is the dumping of excess capacities on the open EU market and the need for new approaches to deal with industrial subsidies in addressing these overcapacities.

We are losing manufacturing jobs at an alarming rate. In AEGIS Europe sectors alone, approximately 34,000 direct jobs have been lost compared to the pre-COVID period. Considering that each direct job loss triggers 3-4 indirect job losses, this amounts to around 100,000 total jobs lost.

Since the 2008-2009 financial crisis, the situation has worsened, with 2.5 million industrial jobs disappearing and numerous plants across Europe shutting down. A wave of closures has been rolling out across the EU, mainly in the automotive sector and energy-intensive industries, but also in green tech sectors such as batteries. These closures are occurring throughout the EU.

Against this backdrop, and a year after the publication of the Draghi Report, AEGIS Europe, together with Plastics Recyclers Europe, calls on the EU to:

1. Strengthen and expedite the use of Trade Defence Instruments (TDIs) to timely protect EU industry from unfair foreign practices:

• Injury Margin: WTO law does not provide for injury margins; thus, the EU has full discretion in determining the calculation method. The current methodology does not account for the volumes of imports or potential volumes. Therefore, factors such as the actual market share of imports and potential market share (due to overcapacities) can be legally used to increase the injury margin.

• Dumping Margin: The normal value in the country of origin is compared to the export price to the EU, subject to a fair comparison. If the export price to the EU reflects a higher price due to social and environmental costs borne in the EU, an adjustment should be made to increase the margin by subtracting these costs from the export price. Both changes do not require an amendment to the basic Anti-Dumping Regulation.

• Small and medium-sized enterprises (SMEs), often the most harmed by unfair trade, are effectively excluded from investigations due to the heavy data-gathering burden. While DG TRADE has set up an SME Helpdesk, it must be empowered to support enterprises in collecting data and completing injury questionnaires. Legally, injury evaluations for SMEs do not have to follow the same standards as those for large enterprises.

• Address energy subsidies: Energy has a big share in the cost of production of key industries in the Union. While EU industries have been affected by an increase of energy costs, notably due to Russian’s invasion of Ukraine, third countries which have subsidised energy have been able to unfairly take market shares from EU industries. Consideration must be given to taking action, both in the WTO and in domestic Anti-Subsidy actions, to counter these massive subsidies which can be considered Specific in that they apply to fossil fuels only.

2. Upgrade the toolbox of EU industries by optimizing old instruments or designing new ones, such as an overcapacities instrument:

• We call for an instrument that: i) must not be limited to the steel sector; ii) is available independent of the Safeguard instrument. Iii) can be triggered by the EU industry, to avoid political interferences. The instrument must allow the imposition of punitive tariffs, or any equivalent measure, at the border, on goods sourced in third countries which have given support directly or indirectly to the rise of economically irrational overcapacities.

3. The Foreign Subsidies Regulation represents an important trade autonomous tool to protect the European Industry’s competitiveness and ensure a level playing field on the Single Market. In recent years, there has been an increasing influx of subsidised bidders from State-owned economic operators from third countries: this unfair situation can lead to a loss of market share and deindustrialisation of the EU, as well as having negative effects on competition in the Single Market. Ahead of the publication of the EC guidelines in 2026, and the deadline for the regulation’s evaluation, we call for key improvements such as:

• Thresholds: The threshold of EUR 250 million for public procurement is high and fails to capture many important projects, for example in the construction or rail supply industries.

• Withdrawing bidders: It should not be permitted, in case of recurrent suspicions of unduly advantageous tenders, that bidders withdrawing from a procedure to avoid redressive measures can again bid in another procedure unless they have proven that they do not benefit from distortive subsidies.

• Nature of bidders: The shareholders’ structure of bidders should be checked and go beyond a mere declaration, in order to avoid participation from State-owned enterprises in bids.

• Reduction of the administrative burden for European companies which are equally concerned by the reporting obligations stemming from the Regulation.

AEGIS Europe urges the Commission to take action on global overcapacities and support the safeguard case on ferroalloys and silicon

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Brussels, 14 October 2025 – AEGIS Europe welcomes the European Commission’s initiative to address the negative trade-related effects of global overcapacity in the steel sector, and warns that the challenge of overcapacities extends far beyond steel. This requires a solution for the steel value chain as well as for other sectors facing similar challenges.

Overcapacities have become a value-chain problem, affecting upstream and downstream industries alike – from raw materials to final goods. China alone can meet Europe’s entire industrial demand several times over in many manufacturing sectors, while other third countries are also expanding production, making overcapacity a truly global phenomenon. This systemic distortion, largely – but not exclusively - driven by state-supported production, is undermining Europe’s drive toward strategic autonomy, deterring investment, and accelerating deindustrialization.

Recent developments in the ferroalloys and silicon sector, in particular, illustrate the scale of the challenge. With existing spare capacity exceeding 21 million tonnes and planned capacity increases of more than 13 million tonnes worldwide, global overcapacity for manganese and silicon-based alloying elements has reached unprecedented levels. These volumes cannot be absorbed by the market, especially amid declining European consumption and shrinking export opportunities as third countries adopt their own trade defence measures.

This crisis has brought Europe’s ferroalloys and silicon industry to the brink of collapse. As noted by Euroalliages – the European federation representing that industry, and active member of AEGIS Europe, the last silicon-metal producer in the EU recently closed. Silicon and ferro-alloys materials are indispensable for the production of steel, aluminium, batteries, and advanced defence applications – from cars and energy storage to drones and strategic infrastructure. Without them, Europe’s industrial resilience and economic security are at risk.

AEGIS Europe therefore expresses its strong support to the imposition of measures in the framework of the safeguard case on manganese and silicon-based alloying elements. The adoption of effective safeguard measures is essential not only to preserve the future of the ferro alloys and silicon industry, but also to prevent further deindustrialization across interconnected value chains.

AEGIS Europe believes this case is an example of the urgent need to adopt a comprehensive approach to overcapacities, extending to all affected sectors. This includes:

• Establishing a regular EU monitoring system of overcapacities risks by country and sector, building on the model of import surveillance;

• Creating an EU instrument to counter overcapacities based on the rationale behind the new steel measures. This instrument should be applicable across all sectors, independent of the safeguard mechanism, and triggered by industry;

• Enabling effective border measures, including punitive tariffs or equivalent actions, against imports originating from countries that directly or indirectly subsidize overcapacity.

As Commission President Ursula von der Leyen stated, “Global overcapacity is damaging our industry. We need to act now.” AEGIS Europe fully supports this call and urges the Commission to translate this recognition into a robust and forward-looking policy response.

DG Trade TDI Report 2024: Progress made, challenges remain

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Brussels, August 2025: AEGIS Europe welcomes the release of the 2024 Report on the Trade Defence Instruments (TDI) by the Commission, which confirms the EU’s continued commitment to tackling unfair trade practices and defending European industry. The report highlights a record 33 new investigations launched in 2024 – the highest number since 2006 – and an increase in the total number of definitive and provisional measures in force, rising from 186 at the end of 2023 to 199 at the end of 2024.

However, AEGIS Europe remains concerned about the Commission’s ability to sustain this level of activity without additional resources in Directorate G of DG TRADE. Already, staffing shortages have contributed to delays in launching new investigations. AEGIS Europe calls for the urgent reinforcement of human resources to ensure timely and effective investigations and enforcement of TDIs.

A significant share of the new cases shows evidence of overcapacities putting unfair pressure on European industries in the EU and in export markets. This phenomenon must serve as a wake-up call: Europe’s manufacturing base is at risk. An EU instrument to address systemic overcapacities across all sectors – not just steel – is urgently needed. This instrument must be independent of the Safeguards instrument. AEGIS Europe welcomes the Commission’s commitment to take social and environmental costs into consideration when assessing injuries sustained by European producers. However, poor social and environmental standards in countries where dumped imports originate also exert significant distorting effects on export prices, which should be further reflected when calculating the dumping margins.

The basic Anti-Dumping Regulation should be amended to remove the Lesser Duty Rule, a WTO+ provision which weakens the deterrent effect of TDI measures by capping duties at the lower of the dumping or injury margins. AEGIS Europe supports its removal and calls for broader use of the Commission’s discretion to apply full dumping duties where warranted.

Finally, we commend the Commission’s constructive dialogue with the European industry, including its recognition of AEGIS Europe’s contribution to the Brussels trade policy debate. Such engagement must now translate into concrete measures that strengthen Europe’s industrial resilience.

AEGIS Europe statement on U.S. reciprocal tariffs

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Brussels, April 7, 2025. The European Union and the United States maintain the most integrated economic partnership in the world. When considering trade in goods, services, and investment, the transatlantic relationship is unmatched in scale and depth, supporting millions of jobs on both sides of the Atlantic.

On February 13, the White House published a statement announcing the introduction of "reciprocal tariffs" targeting several U.S. trade partners, including the EU. This was swiftly followed by the imposition of duties on European steel and aluminium in March, alongside a sweeping 20 percent tariff on all EU imports, and a further 25 percent global tariff on cars, which entered into force between April 2 and 3. The U.S. administration has indicated it will respond with additional retaliatory measures in case of a European counteraction.

AEGIS Europe is deeply concerned by these developments. We strongly support free and rules-based trade conducted on fair terms. A spiral of retaliatory measures risks triggering a trade war that would have severe consequences for the global economy. Furthermore, U.S. tariffs on a wide range of partners—including China, Canada, Mexico, Japan, and Korea—risk generating trade diversion towards the EU. This is particularly concerning for export-oriented sectors like pulp and paper or ceramics, as well as for industries already facing global overcapacities, such as steel and aluminium, where redirected exports could lead to a surge in imports and drive prices down.

Ultimately, a self destructive trade dispute between the EU and the U.S. would primarily benefit illegally dumped imports and state-subsidized companies from China and other countries contributing to non market overcapacities, when both sides should instead cooperate to rebalance the global market and tackle the root causes of distortions. An escalating trade war between the EU and the U.S. could also affect other sectors like fertilizers and crops, which have already been severely disrupted—first by the pandemic, then by Russia’s war on Ukraine. These two major crises have revealed the vulnerability of the global food system, which cannot sustain higher global food prices. It is therefore essential to avoid placing this system under additional strain through new trade barriers.

In light of these risks, AEGIS Europe encourages the European Commission to act cautiously, maintaining close dialogue with the business community to safeguard European competitiveness and minimize harm to the EU industrial value chains. At the same time, we urge continued engagement in negotiations with the U.S. to de-escalate tensions and maintain the stability of transatlantic supply chains.

However, should negotiations fail and escalation further develop, AEGIS Europe calls on the EU to:

• Respond swiftly, firmly, and proportionately with targeted restrictions on U.S. imports: the aim should be to preserve leverage, deter further escalation, and keep pathways to a negotiated solution open.

• Conduct sector-specific vulnerability assessments: exclude from retaliation lists those products that are essential to EU industries and at risk of supply shortages. The 2018 retaliation list should be reviewed following broad consultations with industry sector representatives, as sectoral trade dynamics have evolved.

• Distribute the burden of retaliatory measures: not only goods but also services—given the substantial U.S. surplus in this area—should be included in the scope of European countermeasures.

• Proactively deploy Trade Defense Instruments (TDIs): monitor trade flows from third countries and be ready to expeditiously activate TDIs to prevent market disruption and protect the EU’s industrial base.

Tariffs would raise costs in the United States and distort trade flows globally. At a time when economic stability is most needed, such measures risk undermining the efficiency and integration of global markets. Maintaining open strategic autonomy as a key objective, while upholding WTO principles, is essential for the European Union to ensure economic resilience and avoid excessive dependence on external actors. A coordinated, measured, and forward-looking response is therefore required to safeguard Europe’s economic interests and support a stable and predictable international trading system.

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AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.

AEGIS Europe New Advocacy Campaign: Top 5 Priorities for #FairTradeNow

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In a fiercely competitive global market, Europe’s manufacturing sectors face growing pressure from unfair trade practices. Overcapacities in many sectors and in many countries, as well as imports that disregard EU environmental and social standards, create an uneven playing field, leaving European industries at a disadvantage.

The Draghi Report has highlighted the urgent need for a resilient and competitive European industry that aligns with Europe’s strategic interests. The Report highlighted the gaps in the EU’s current trade defence mechanisms that need to be addressed. We need flesh on the Draghi bones. Market performance indicators reveal a decline in competitiveness in 2023 compared to 2012. This is evident in reduced production across sectors such as steel, silicon, ferroalloys, aluminium, and paper & board.

Additionally, exports have dropped significantly in sectors like finished steel, man-made fibres, and paper & board. Increased energy prices also play a role, but the real problem is the dumping of excess capacities on the open EU market and the need for new approaches to deal with industrial subsidies in addressing these overcapacities. Fairness in access to public procurement markets and in the imports of procured goods into the EU should also be enhanced. For EU public procurement, this includes enforcing best value award criteria, fostering EU content and restricting participation and access to EU funds when it comes to foreign bidders with which the EU has no agreement on procurement.

We are losing manufacturing jobs at an alarming rate. In AEGIS Europe sectors alone, approximately 34,000 direct jobs have been lost compared to the pre-COVID period. Considering that each direct job loss triggers 3-4 indirect job losses, this amounts to around 100,000 total jobs lost. Since the 2008-2009 financial crisis, the situation has worsened, with 2.5 million industrial jobs disappearing and numerous plants across Europe shutting down.

A new wave of closures rolls out on the EU, mainly in the automotive sector and the energy intensive industries, but also in the green tech sector like batteries. These closures are situated in all parts of the EU. AEGIS Europe strongly believes that effective trade defence is needed to ensure the future of the EU manufacturing. Unfair trade must be stopped to allow the EU to remain open to fair trade and create and maintain a skilled and dynamic workforce.

We have five actionable priorities to strengthen the EU’s trade defence toolbox. These priorities call for a more assertive trade defence stance, effective anti-circumvention measures, and policies that ensure support for all segments of European industry, including small and medium enterprises (SMEs).

Stronger Use of Trade Defence Tools to Protect EU Manufacturing The EU is a modest user of trade defence when adjusted for the size of our economy. The anti dumping and anti-subsidy measures we impose are way below other OECD countries (mainly but not exclusively US). For example, in 2023, the EU’s anti-dumping duty on Chinese silicon was set at 16.8%, while the US imposed a 139% duty, and Canada set a duty ranging from 47%-235%. This difference makes our trade defence ineffective.

EU duties can be higher within the existing rules ·Environmental and Social Costs: Duties should incorporate differences in environmental and social standards; otherwise, imports that fail to meet EU standards gain an unfair advantage. Re-evaluate the Lesser Duty Rule (LDR): Currently, the EU often applies a “lesser duty” rather than the full anti-dumping duty to reduce consumer impact. However, in many cases, these reduced duties don’t adequately protect EU industries, particularly when large import volumes are involved. Since 2016, the LDR has only been waived twice out of 13 requests from industry, even though full duties are often needed to address injury to EU manufacturers. This rule should only apply when it genuinely benefits EU interests. Consider Import Volume in Injury Calculations: Import volumes should be factored into the injury margin calculations to fully capture the scale of market impact, particularly as EU manufacturers face increased competition from overcapacities abroad.

Enhanced Anti-Circumvention Measures Where duties are bypassed through circumvention methods like re-routing, re-formulating and switching manufacturing, trade defence measures are undermined. Strengthening monitoring, increasing transparency, and enabling data-sharing between EU agencies (such as DG Trade, OLAF and the EPPO) should help identify and counter these practices effectively.

Support for SMEs in Trade Defence Participation SMEs face substantial barriers in engaging in trade investigations due to complex reporting requirements and deadlines. Simplified procedures and flexible timelines would enable them to participate more effectively, making it easier for them to defend against unfair trade practices.

Ensure Trade Agreements Support Europe’s Strategic Raw Materials Needs The EU’s Free Trade Agreements (FTAs) should prioritise Europe’s critical raw materials supply chain, in line with the goals of the Critical Raw Materials Act. Current FTA negotiations must carefully balance the need for reliable supply with the protection of EU industries already facing unfair competition. This means: Tailoring Tariff Liberalisation: Avoid unnecessary tariff reductions for critical raw materials, like aluminium, where EU industries are vulnerable to overcapacity and unsustainable production practices in exporting countries. Promoting Fair Competition and High Standards: FTAs should enforce strict Rules of Origin and include sustainability clauses that align with EU standards. This ensures fair conditions for EU companies and helps meet Europe’s environmental and social commitments