UPDATE 1-EU plans to cut steel import quotas, hike tariffs to 50%

(Adds detail, context throughout) By Julia Payne BRUSSELS, Oct 1 (Reuters) – The European Commission will propose cutting steel import quotas by nearly half and hiking duties on volumes above those levels to 50% in line with tariffs imposed by the U.S. and Canada, a source briefed on details told Reuters on Wednesday. The measures will be part of a new package for the steel sector set to be officially unveiled on October 7. Stephane Sejourne, the Commission's executive vice president for industrial strategy, briefed steel associations on Wednesday ahead of next week's announcement. The bloc's current steel safeguards will expire on June 30 next year. The EU and Western allies are trying to contain the overcapacities created by subsidized Chinese factories in steel and other sectors. The EU already tightened current steel import quotas by 15% from April 1, and the Commission is investigating market trends for potential aluminium safeguards as well as export duties on scrap metal. Steel jumped into the spotlight early this year after U.S. President Donald Trump hiked tariffs on foreign steel and aluminium imports to 50%. After reaching a general trade agreement with Trump in late July, the EU said it would work closely with Washington in a "metals alliance" to ringfence their respective production from China. European steelmakers still face an export tariff of 50% to the U.S. EU trade commissioner Maros Sefcovic met U.S. Trade Representative Jamieson Greer in Asia earlier this month to reignite the talks. EU sources previously told Reuters the new safeguards would be a jumping-off point for detailed negotiations with Washington. (Reporting by Julia Payne; Writing by Inti Landauro; Editing by Benoit Van Overstraeten, Philip Blenkinsop and Jan Harvey)

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