New trade barriers in the steel market: Limited impact on Ukraine
Following the introduction of an additional 25% customs duty on selected steel imports by the USA in 2018, the EU and other markets responded by imposing their own safeguard measures. Especially the measures of the USA and EU matter for Ukraine: While the EU is Ukraine’s primary destination market for steel products with a share of 38% of steel exports, the USA are the third most important market, with a share of 8%. Steel remains a key export good of Ukraine, accounting for 23% of total goods exports in 2018.
The US measures, a 25% additional customs duty on imports in selected product lines, will lead to a reduction of only USD 78 m in Ukrainian steel exports to the USA in 2019. The EU’s measures will lead to a reduction of Ukrainian exports by USD 227 m, despite customs duties applying only after Tariff Rate Quotas are exhausted. The larger impact of EU measures is due to the EU being a more important destination for Ukraine. The total reduction in Ukrainian steel exports in 2019 due to these measures will be below 3% of total steel exports. Hence, the overall effect of the new trade barriers on Ukraine, though clearly negative, will remain limited.