Serbia’s President Aleksandar Vucic said on October 9 that European Union steel tariffs will hit the country’s Smederevo ironworks, owned by China’s Hbis Group, and warned that the measures could weaken Serbia’s attractiveness for foreign investment.

In an extraordinary public address, Vucic said the EU’s planned reductions in steel import quotas and higher tariffs would put the steel plant — which employs around 5,000 people, with 20,000 more indirectly dependent — under severe pressure. The European Commission plans to halve quotas for steel imports from outside the EU, with excess imports facing doubled customs duties, from 25% to 50%.

“None of us can withstand that, but neither can European car manufacturers,” Vucic said, referring to opposition from automakers relying on cheaper steel imports. He added that he would appeal to European Commission President Ursula von der Leyen to exempt Serbia, a candidate country for EU membership, from some of the tariffs.

Vucic also linked the EU tariffs to broader challenges for Serbia’s investment climate, citing rising labour costs and the “intentional and calculated destruction of universities and dual education” in the past year, referring to a year of anti-government protests.

Separately, Vucic addressed the start of US sanctions on Serbia’s Oil Industry (NIS), majority-owned by Russia’s Gazprom group. He said the measures would affect citizens but that Serbia has taken steps to ensure energy security. The NIS refinery can operate without oil flows until November 1, he said.

“The sanctions are expected but very bad news for all citizens,” Vucic said, adding that they were aimed at exerting financial pressure on Russia rather than Serbia’s leadership. He confirmed ongoing discussions with Russian and American officials to mitigate impacts.

US sanctions on NIS were first announced in January due to Russian ownership but delayed until October 8. The US embassy in Belgrade said the measures were intended to pressure Russia to end the war in Ukraine and urged Serbia to reduce Russian stakes in its key energy assets.