Turkey has announced a significant extension of its safeguard measures on imports of alloy and non-alloy wire rod, a move that will have far-reaching implications for the global steel trade. The country, which initially introduced temporary safeguard measures in early 2024, has now decided to extend these measures for an additional three years. This decision reflects Turkey's ongoing efforts to protect its domestic steel industry while balancing international trade obligations.
The extended safeguard measures introduce a tiered system of import duties that will gradually decrease over the three-year period. From June 15, 2024, to January 6, 2025, importers will be required to pay a duty of $175 per metric ton on wire rod imports. This rate will then decrease to $170 per metric ton for the period from January 7, 2025, to January 6, 2026. In the final year of the extension, from January 7, 2026, to January 6, 2027, the duty will further reduce to $165 per metric ton. This gradual reduction aims to provide a balanced approach, offering continued protection to domestic producers while allowing for a gradual adjustment to international competition.
In a notable development, the Turkish government has included provisions for developing countries within these safeguard measures. Products originating from 113 designated developing countries and customs territories will be exempt from the safeguard measures. However, these exemptions come with specific quota restrictions. During the first period of the safeguard measures, a quota of approximately 33,900 metric tons will be applied to these countries collectively. This quota will then increase to about 67,800 metric tons for both the second and third periods. To ensure fair distribution, the quota allocated to each individual country or customs territory is capped at 11,299 metric tons in the first period and 22,599 metric tons in the subsequent periods.
The safeguard measures cover a wide range of wire rod products, as indicated by the extensive list of Harmonized System codes provided in the announcement. This comprehensive coverage suggests that Turkey is taking a broad approach to protecting its wire rod industry, encompassing various grades and types of the product.
These extended measures build upon the temporary safeguard duty of $175 per metric ton that Turkey imposed on alloy and non-alloy wire rod imports for a 200-day period starting from January 8, 2024. The decision to extend and modify these measures indicates that the Turkish government has assessed the impact of the temporary measures and determined that continued protection is necessary for the domestic industry.
The context for these safeguard measures becomes clearer when considering Turkey's recent steel trade figures. In the period from January to May 2024, Turkey saw a significant increase in its steel exports, which rose by 48.6% compared to the same period in 2023, reaching 5.4 million metric tons. Conversely, imports of steel products into Turkey decreased by 12.1% year-on-year over the same five-month period, totaling 7.1 million metric tons. These figures suggest that Turkey's steel industry is experiencing a shift in its trade balance, with exports growing substantially while imports are declining.
