Ukraine’s steel industry is facing a new challenge as European Union tariffs, primarily aimed at curbing cheap steel imports from China, are inadvertently squeezing Ukrainian exports. Yuriy Ryzhenkov, CEO of Metinvest—one of Ukraine’s largest steel producers—has criticized the EU’s recent import restrictions, arguing that Ukraine has been unfairly grouped with other exporters despite its ongoing war and economic struggles.
Collateral Damage from EU’s Protective Tariffs
In an effort to shield its domestic steel industry from a flood of inexpensive imports, the European Union recently imposed significant restrictions on steel entering the bloc. These measures include capping the total amount of steel that can enter the EU tariff-free at 18.3 million tonnes annually—a sharp 47% reduction compared to 2024 levels. While the policy targets countries like China and Turkey, Ukraine has found itself caught in the crossfire.
Despite the EU-Ukraine Free Trade Agreement (FTA), which facilitates tariff-free trade between the two, the EU retains the right to implement protective measures. The new quotas do include some country-specific allocations, but the overall policy does not provide Ukraine with an exemption or a meaningful carve-out.
Ryzhenkov has voiced strong opposition to this approach, emphasizing that Ukraine’s steel sector is not just another exporter but a critical part of a country at war. “Ukraine has been bundled together into those measures without any consideration for the situation Ukraine is in,” he said, highlighting the ongoing conflict with Russia and the vital role steel exports play in Ukraine’s economy and survival.
Steel Industry’s Role in Ukraine’s Economy and War Effort
Before Russia’s full-scale invasion in 2022, metallurgy and mining accounted for roughly 10% of Ukraine’s national income and about a third of its exports. The European Union has long been Ukraine’s largest steel customer, making access to this market essential for the industry’s viability.
Yet the conflict has inflicted severe damage on Ukraine’s steel infrastructure. All major steel mills have been targeted by Russian bombardments, with recent strikes intensifying to the point that in September 2023, Ukraine produced no steel at all for the first time in roughly 150 years. The human cost has been devastating as well, with nearly 800 Metinvest workers killed since the war began.
Despite these hardships, the steel sector remains a pillar of Ukraine’s resilience, providing both economic support and employment amid wartime destruction. Ryzhenkov described the company’s efforts to protect workers through reinforced shelters and strict safety procedures during air raids, though he acknowledged that shielding an entire steel mill from attacks is impossible.
Economic Survival Threatened by Market Access Restrictions
The impact of the EU’s tariffs on Ukraine’s steel exports could be catastrophic. Industry estimates suggest a 50–60% drop in exports to the EU, which is essentially Ukraine’s only viable market given current logistics constraints. This reduction threatens not only Metinvest but the broader Ukrainian steel sector, which is already grappling with damaged infrastructure and wartime disruptions.
From the EU’s perspective, the quotas do guarantee some level of steel exports from Ukraine, but at volumes significantly lower than in previous years. A European Commission spokesperson acknowledged Ukraine’s difficult situation and noted that compensation measures have been offered to major suppliers, including Ukrainian firms. However, these compensations do not fully alleviate the loss of market access or the resulting financial strain.
Ryzhenkov warned that the upcoming winter could be “one of the hardest in our history,” as the steel industry struggles to survive amid shrinking markets and ongoing conflict. Without access to alternative export destinations, the EU’s protective steel policies risk undermining a key sector that supports Ukraine’s economy and war effort.
Balancing Protectionism and Solidarity in EU Trade Policy
The EU’s dilemma highlights the complex interplay between protecting domestic industries and supporting an ally at war. While the bloc must safeguard its steel producers from unfair competition, the blanket application of tariffs risks penalizing Ukraine at a time when economic support is crucial.
This situation calls for more nuanced trade policies that differentiate between countries based on geopolitical and humanitarian contexts. A tailored approach—such as a specific carve-out or increased quotas for Ukrainian steel—could help sustain Ukraine’s economy without compromising the EU’s protective objectives.
Ultimately, the EU’s steel tariffs underscore the challenges of maintaining solidarity with Ukraine while managing internal economic pressures. Finding a balance that supports Ukraine’s steel industry could reinforce the bloc’s broader strategic and moral commitment to Ukraine’s sovereignty and recovery.
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For more context, see related Peack News coverage and explainers linked below.