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Enrico Fornelli: ‘Tariffs are useful, but the real challenge is to boost domestic demand’

The recent EU proposal to cut duty-free import quotas from outside the EU by 50% and raise duties to 50% is certainly a strong signal. As a European steel group, we see this as recognition of the complexity of the situation we are experiencing: we need protection from dumping by those who do not have the same constraints on CO2, energy and social standards as we do.

However, this alone is not enough.

“The real problem facing the sector is weak domestic demand, with European production having fallen sharply in recent years. Tariffs need to be complemented by an industrial plan to stimulate consumption: massive investment in infrastructure, tax incentives for user sectors, preferences in public procurement for sustainable steel and reduction of the energy gap. We must also be aware of the risks. Such a significant increase in tariffs could trigger trade retaliation by exporting countries, with potential repercussions on other sectors of the European domestic economy,” explained Enrico Fornelli.

This is why we agree with Federacciai‘s position: the trade shield is good, but it must be accompanied by concrete measures such as the 60% Buy European rule in public procurement and a review of the #CBAM.

‘Protectionist measures give us breathing space, but without stimulating demand, we risk protecting a decline rather than a revival.’

Click here for the full article by Federico Piazza.