Iceland Postpones EU Defence Statement Amid Ferroalloy Trade Dispute

Iceland Halts Defence Pact Over EU Metal Tariffs

Reykjavik, Iceland – Iceland's Foreign Minister Þorgerður Katrín Gunnarsdóttir declared on November 19, 2025, that Iceland would not proceed with signing a planned security and defence statement with the European Union (EU). The move comes as an 'initial reaction' to the EU's recent decision to implement new protective measures on metal trade, specifically concerning ferroalloys, without granting exemptions to Iceland and Norway.

The security and defence statement was originally scheduled for signing on Thursday, November 20, 2025. Minister Gunnarsdóttir expressed 'heavy and great disappointment' over the EU's stance, stating that it violates the fundamental principles of the European Economic Area (EEA) agreement, which governs trade relations between Iceland, Norway, and the EU.

EU Safeguard Measures on Ferroalloys

The European Commission introduced country-specific limits on ferroalloy imports, which are crucial for steel and iron production. These safeguard measures, effective from November 18, 2025, are set to reduce EU imports of certain silicon- and manganese-based alloying elements by 25% compared to the average import volumes from 2022-2024. The measures, which will remain in place for three years until November 17, 2028, include tariff-rate quotas (TRQs) and minimum prices. The EU justified these actions by citing a sharp rise in ferroalloy imports, which they claim caused 'serious damage' to the European industry due to global overcapacity and import penetration at lower prices.

Iceland and Norway are significant suppliers, collectively accounting for almost half of the EU's ferroalloy imports. Despite protests from both countries, the EU did not grant them an exemption, a decision that has been met with strong criticism from Reykjavik and Oslo.

Broader Implications for EU-Iceland Relations

While expressing immediate dissatisfaction, Minister Gunnarsdóttir also reiterated Iceland's interest in fostering deeper ties with the EU. She emphasized that EU membership is in Reykjavik's geopolitical interests, noting that Iceland might still sign the defence agreement 'maybe in a couple of weeks' if the EU demonstrates a 'clear vision on how they are treating their friends.' Discussions for a Security and Defence Partnership Agreement between the EU and Iceland were initiated in July 2025, following a visit by European Commission President Ursula von der Leyen to Iceland, aimed at enhancing collaboration on security and defence.

The minister's comments highlight a delicate balance between protecting national economic interests and pursuing broader strategic cooperation. Norway's Foreign Minister also acknowledged the issue as a 'key topic' but ruled out immediate trade countermeasures, emphasizing Norway's status as a small, open economy. The European Commission has indicated it will hold separate consultations with Norway and Iceland to analyze the economic impact of the new measures.