EU governments have agreed a negotiating mandate on a new trade instrument aimed at shielding the bloc’s steel sector from the effects of global overcapacity, moving Brussels closer to replacing its expiring safeguard regime. Ambassadors signed off the Council position this week, giving the presidency the green light to open talks with the European Parliament on legislation first proposed by the European Commission in October. The initiative comes as the EU sharpens its focus on industrial resilience, competitiveness and security of supply, with steel increasingly framed as a strategic input for defence, infrastructure and the green transition. Officials involved in the talks say the aim is to avoid a legal cliff edge when current safeguards lapse in mid 2026 while sending a signal to global producers that Europe intends to keep its market tightly managed. At the core of the Council mandate is a sharp tightening of import volumes and penalties, largely mirroring the Commission’s original proposal. The text endorses a cap of 18.3 million tonnes of steel that can enter the EU each year without tariffs, a level that institutions describe as a near halving compared with recent quota volumes. Once that ceiling is breached, imports would face a 50 percent duty, doubling the charge applied under the current safeguard system. Policymakers argue the tougher numbers are justified by persistent global overcapacity and state backed production in third countries, which they say has distorted trade flows and depressed prices in Europe. The measures are presented as temporary but necessary to stabilise a sector facing weak demand and heavy investment needs. Member states have also adjusted the proposal to address concerns from steel using industries and importing countries inside the bloc. The Council position strengthens references to a Union interest test, requiring the Commission to weigh the impact of restrictions on downstream manufacturers alongside the needs of producers. It also adds language on the risk of substantial price increases, reflecting pressure from sectors such as automotive, construction and machinery that rely on predictable steel supplies. Technical changes agreed by ambassadors would allow unused quota volumes to be carried over within the same year, a detail welcomed by traders and service centres that manage complex supply chains. Governments argue these flexibilities will help avoid sudden shortages while keeping the overall regime restrictive. Another sensitive element is enforcement and origin tracking. The mandate backs the introduction of a melt and pour requirement, intended to make it harder to reroute steel through intermediary countries to bypass quotas. However, application of this rule would be delayed until October 2026 to give customs authorities and businesses time to prepare. The Council also asks the Commission to assess whether future quota allocation should be based on the country where steel is melted and poured, rather than where it is shipped from, with a review clause built into the regulation. EU institutions have repeatedly warned that global steel overcapacity is expected to grow in the coming years, intensifying the challenge of monitoring and enforcement. Attention now turns to the European Parliament, where committees are preparing their response to the proposal amid competing lobbying from producers and users. Lawmakers are under pressure to reach a deal before the current safeguards expire, with industry warning that any gap could trigger a surge of imports. The debate is playing out against a backdrop of restructuring announcements and job warnings at major European steelmakers, reinforcing the political sensitivity of the file. At the same time, trading partners are watching closely, wary that stricter EU rules could divert excess steel into other markets and add to global trade tensions already shaped by US tariffs and retaliatory measures....