Chancellor Olaf Scholz has called for stronger protective measures from the European Union to shield Germany’s steel industry from what he describes as unfair competition, particularly from foreign steel imports. In a recent interview with Funke Media Group, Scholz stressed the need to secure the long-term future of Germany’s steel sector, which is a key part of its industrial backbone. He pointed out that the influx of cheaply priced steel, particularly from countries like China, poses a serious threat to German companies, potentially leading to job losses and undermining the industry’s ability to invest in more sustainable technologies.
Scholz’s remarks come as Germany, along with other European Union countries, grapples with the rise in imports of heavily subsidized Chinese steel and electric vehicles. The European Commission has acknowledged that these imports are often sold at prices below market value, a practice known as "dumping." This has raised concerns within the EU about the negative impact on local industries, particularly steel manufacturers, who are struggling to compete against foreign producers benefiting from government subsidies. In the interview, Scholz urged the EU Commission to take stronger action against these unfair trade practices to protect European jobs and industries.
Thyssenkrupp AG, one of Germany’s largest steelmakers, has been at the center of these challenges. The company has faced significant financial difficulties due to a global steel oversupply and rising energy prices. In November 2024, Thyssenkrupp proposed laying off 5,000 employees and transferring another 6,000 jobs to external service providers or through the sale of operations. This decision came as a result of mounting losses in the company’s steel division, which has struggled to remain competitive in a market flooded with cheap imports. Scholz, who is preparing for a re-election campaign in February, has expressed his concern about these potential job cuts and urged the company to reconsider them.
As part of his efforts to address the challenges facing the steel industry, Scholz said that he was open to exploring different options to support Thyssenkrupp’s steel unit, including the possibility of the German government taking a temporary stake in the company. He noted that, during the COVID-19 pandemic, the German government had intervened to assist companies like Lufthansa AG, providing financial support to help them navigate difficult times. Scholz emphasized that while no decision had been made, he was not ruling out any potential measures to protect Germany’s industrial base, especially in critical sectors like steel.
Scholz also highlighted the importance of providing a stable and affordable energy supply for steel manufacturers, a key issue that many industries across Europe are facing. He suggested that one of the ways to support the steel industry’s transition to more sustainable practices is by guaranteeing “reliable electricity prices” for companies. This would help steelmakers to invest in greener alternatives to traditional blast furnace technology, which is heavily carbon-intensive. Scholz pointed to the billions of euros the German government has already committed to subsidizing these environmentally-friendly projects, which aim to reduce carbon emissions and make steel production more climate-conscious.
The transition to more sustainable steel production is crucial for Germany's steel industry, as the sector is under increasing pressure to meet stricter climate targets. Steelmakers are investing in innovative technologies like electric arc furnaces, which produce steel with significantly lower carbon emissions than the traditional blast furnaces. However, these new technologies often come with high initial costs, and without guaranteed access to affordable energy, many steel producers could be reluctant to make these investments. Scholz’s call for a reliable electricity price is seen as a necessary step to ensure that Germany’s steel sector remains competitive and capable of meeting its climate goals.
The growing concerns over the competitiveness of the German steel industry are not unique to Germany alone; other EU countries are also facing similar challenges. The European Commission has been under pressure from multiple member states to take stronger action against dumping and unfair trade practices. However, finding a balance between protecting local industries and maintaining free trade principles has been a contentious issue. Scholz’s comments reflect a growing frustration within the EU about the global imbalances in trade, particularly in the steel sector, which has seen a flood of subsidized imports from countries like China.
As Scholz prepares for his re-election bid, his stance on protecting Germany’s steel industry could become a significant issue in the upcoming campaign. The steel sector, which is a major employer in regions like North Rhine-Westphalia, has long been a cornerstone of Germany’s industrial strength. With the country facing numerous challenges related to trade imbalances, energy prices, and environmental regulations, the future of the steel industry remains uncertain. Scholz’s calls for stronger EU action, along with potential government support for struggling companies like Thyssenkrupp, reflect his commitment to ensuring that Germany’s steel sector remains a vital part of the nation’s economy in the years to come.
