From 1 July, the European Union will drastically reduce its duty-free steel import quotas from 30.5 million tonnes to 18.3 million tonnes. For quantities exceeding this quota, tariffs will rise by as much as 50 per cent.
Speaking to Radio Belgrade 1, Bojan Stanić of the Serbian Chamber of Commerce discussed the scale of the blow this could deal to countries outside the EU, particularly Serbia, whose exports depend heavily on the European market.
By introducing these new measures, the European Union is seeking to protect its strategically important steel industry, as domestic European steel production is losing competitiveness even within its own internal market.
The main reason for this is the high cost of production and energy prices, which are significantly higher in the EU than in the United States or China.
A chain reaction from the tariff war and several layers of paradox
The Smederevo steelworks, operated by the Chinese HBIS Group, has been under pressure since 2019, when Brussels first introduced quotas for so-called third countries in response to the tariff war launched by the United States during Donald Trump’s first presidential term. However, as Stanić explains, the situation has since become paradoxical.
“The United States and Europe agreed in 2021 to abolish tariffs and quotas between themselves, yet the European Union kept in place the measures it had introduced against us as a response. Once the dispute with America disappeared, they continued extending quotas on our steel. They call it ‘Chinese steel’, but the factory in Smederevo employs Serbian workers. It is a company established under Serbian law and it pays taxes here,” Stanić said.
He added that the buyers of this steel are European companies themselves, which chose it because it reduced their costs and improved their competitiveness.
“The European Union wants to increase the competitiveness of its own economy, yet at the same time it is raising production costs for its own companies. This is a policy that ignores economic rationality in favour of political objectives, which may prove detrimental to economic potential,” Stanić noted.
Steelworks operating at a loss, strategic partnership with China remains crucial
As a result of these restrictions, production at the Smederevo plant has been reduced, and the steelworks is currently operating at a loss. The survival of the factory and the jobs of around 5,000 employees is currently being sustained thanks to its membership of the globally powerful HBIS Group, as well as the strategic partnership between Belgrade and Beijing.
“For the time being, we have the understanding of the Chinese side. It is difficult to imagine the economic vitality of the entire Danube and Braničevo regions without the steelworks. By maintaining its operations in Serbia, China preserves both its economic and political prestige in the European market. Although Europe can produce steel itself, it remains completely dependent on China for rare metals that are crucial for the green transition, the automotive industry and space exploration,” Stanić said.
He also pointed out that similar protectionist pressures are already spreading into other sectors, citing the examples of import bans imposed by the United States on products from Zijin and Linglong factories in Zrenjanin.
Three key pillars of the steelworks’ importance to Serbia
- Regional economy: It directly employs around 5,000 people and drives economic activity across the entire Danube region.
- Construction sector: It ensures a domestic supply of raw materials for major state infrastructure projects.
- Macroeconomic stability: For years, it has ranked among Serbia’s leading exporters and has been a major generator of foreign currency inflows.
What Serbia can do in an era of economic fragmentation
The world is steadily moving towards economic fragmentation, a trend that, according to estimates, could continue until 2050. In such circumstances, Serbia’s position requires both short-term and long-term diplomatic and economic measures.
In the short term, the goal is to share the burden and maintain steel production in cooperation with China. However, the long-term solution lies to the west.
“The key is to integrate as much as possible into the European Single Market. Switzerland and Norway are part of it, so why shouldn’t Serbia be as well? Last year, for the first time, we recorded a trade surplus with Germany, which demonstrates that German companies recognise us as reliable partners,” Stanić said.
According to him, integration into the Single Market would automatically shield Serbia’s economy from import quotas, tariffs and the forthcoming CBAM – the EU’s Carbon Border Adjustment Mechanism.
“These restrictions that Europe is introducing will significantly affect Serbia and the wider region, but they will bring no benefit to the European economy. Europe can improve its negotiating position and economic strength only if it becomes more self-sufficient, and steel from Serbia unquestionably contributes to that self-sufficiency,” Stanić concluded.
(RTS, 23.06.2026)
https://www.rts.rs/vesti/ekonomija/5979421/zelezara-smederevo-pec-carine.html