Ursula von der Leyen Steers EU’s Strategic Response to U.S. Tariffs: Industry Experts Mobilized
Ursula von der Leyen, President of the European Commission, has been at the forefront of addressing the challenges posed by U.S. tariffs on various industries, notably metals and automobiles. She has engaged in a series of discussions with industry representatives, aimed at understanding the impact of the U.S. tariffs and charting a course of action for counter-measures. These efforts are a direct response to the steel duties imposed by President Donald Trump, which have rattled the international trade system and affected the European Union’s steel market.
On Monday, von der Leyen held a call with metals industry representatives and announced plans to discuss the situation with the automobile sector later in the week. The discussions are part of the European Commission’s initiative to gather data and insights from key industries to help develop long-term solutions. The goal is to protect European industries from the adverse effects of U.S. tariffs, particularly in sectors like steel and automobiles, which are directly impacted by rising trade barriers.
Understanding the European Commission's New Measures: A Response to Global Overcapacity
As part of its commitment to defend European economic interests, the European Commission has indicated that it will propose new trade measures to replace the existing steel safeguards, which are set to expire in June 2026. The new measures are aimed at protecting Europe from global overcapacity in steel production, primarily from countries like China, which have historically flooded global markets with cheap steel.
Currently, the European Union’s steel market faces the risk of being overwhelmed by steel exports redirected from other countries due to the U.S. tariffs. In particular, the EU has raised concerns about deflection of exports, the phenomenon where steel products are diverted to Europe as a result of tariffs imposed by the U.S. on steel imports. To combat this, von der Leyen has promised to introduce trade measures that will safeguard European industries against the risk of being overwhelmed by cheaper imports from outside the EU.
The European Commission has already taken some preliminary steps to strengthen the EU steel market. These steps include the introduction of tighter steel safeguards in April 2025, which aim to reduce steel imports by 15%. However, the Commission recognizes that these measures are temporary and need to be further developed to ensure the long-term health and competitiveness of the European steel industry.
The Impact on the Automobile Sector: Industry Leaders Advocate for Reduced Tariffs
One of the most directly affected sectors by the ongoing tariff wars between the U.S. and Europe is the automobile industry. The EU’s automobile sector, represented by organizations such as the European Automobile Manufacturers' Association, has long been concerned about the 10% tariff that the U.S. imposes on European car imports. In response to this, major players in the industry have pushed for a reduction in these tariffs to foster more balanced trade relations between the EU and the U.S.
Prominent companies like BMW, Volkswagen, and Stellantis have been vocal about the impact of the U.S. tariffs on their business operations. In particular, the ACEA has requested that the EU work towards a negotiated solution that would reduce the 10% tariff to 2.5%—a move that would benefit European car manufacturers by making their vehicles more affordable in the U.S. market.
The automobile industry in Europe plays a critical role in the EU economy, providing millions of jobs and contributing significantly to exports. Therefore, any increase in tariffs or trade barriers could have serious implications for both the industry and the European economy as a whole. By pushing for lower tariffs, European automakers hope to ensure their continued competitiveness in the global market and maintain access to key export markets like the U.S.
The Pharmaceutical Industry: Exemptions and Future Tariff Concerns
In addition to the metals and automobile sectors, the pharmaceutical industry has also been affected by the broader trade tensions between the U.S. and Europe. While pharmaceuticals were initially exempted from the tariffs imposed by Donald Trump, the potential for future tariffs remains a concern. European pharmaceutical companies are urging the European Commission to formulate a clear strategy to protect their interests in this turbulent trade environment.
A major focus of the discussions with industry representatives has been how to enable pharmaceutical and biotech firms to increase production within the European Union, reducing their reliance on global supply chains. The European Federation of Pharmaceutical Industries and Associations (EFPIA), along with other pharmaceutical lobby groups, has emphasized the need for streamlined regulatory processes that would make Europe a more attractive destination for clinical trials and drug manufacturing. This could help the pharmaceutical industry thrive despite global tariff challenges and enhance Europe’s self-sufficiency in this critical sector.
The Commission has also hinted at future tariffs on pharmaceutical imports from the U.S. in response to the broader trade dispute. This makes it even more critical for the EU to develop a long-term strategy to protect the European pharmaceutical market while fostering a more self-reliant production ecosystem within the Union.
The Scrapyard Dilemma: Steel and Aluminum Recycling Challenges
Another key issue discussed during the talks with the metals industry was the shortage of aluminum and steel scrap, which is essential for recycling and production in Europe. Recycling scrap metal is a cost-effective and environmentally friendly way to produce new steel and aluminum, but Europe is facing significant challenges due to a lack of available scrap. This has led to concerns about rising production costs and the ability to meet increasing demand for these metals.
To address this, the European Commission has proposed the introduction of export duties on scrap metal. These duties would aim to prevent scrap from being exported to countries outside the EU, ensuring that it remains available for European industries. Without an adequate supply of scrap metal, the cost of producing steel and aluminum will rise, putting additional pressure on manufacturers in the EU.
Thyssenkrupp's Proposal: European Content Quotas in Procurement
In response to the growing challenges in the steel market, Thyssenkrupp Steel Europe, one of Europe’s largest steel producers, has suggested that the EU introduce binding minimum quotas of European content in both private and public procurement. This would ensure that a certain percentage of the materials used in construction projects and other industrial applications come from European suppliers. This policy would help stimulate the demand for European-made steel and reduce the reliance on imports, thus strengthening the EU steel industry.
A Unified European Approach: The Path Forward
The meetings and calls led by Ursula von der Leyen are part of a broader EU strategy aimed at protecting European industries from the negative effects of U.S. tariffs and global economic uncertainties. Industry leaders across various sectors are coming together to advocate for coordinated action to address the challenges posed by rising protectionism, both within the EU and on the global stage.
There is a growing sense of urgency and clarity among European industry leaders, as they recognize the need for unified action to protect Europe’s economic interests. The discussions have emphasized that a comprehensive approach, involving both industry measures and trade defense mechanisms, will be necessary to ensure Europe remains competitive in the face of rising global trade tensions.
Key Takeaways:
• Ursula von der Leyen Leads Discussions: The European Commission President has led talks with industry leaders from metals, automobiles, and pharmaceuticals to address the challenges posed by U.S. tariffs.
• Steel Safeguards and New Trade Measures: The European Commission plans to propose new trade defense measures to replace current steel safeguards, which are set to expire in June 2026, to protect European industries from global overcapacity.
• Automobile Industry Pushes for Tariff Reduction: The automobile sector, represented by ACEA, is lobbying for a reduction in U.S. car import tariffs from 10% to 2.5%, which would help European car manufacturers stay competitive in the U.S. market.
• Pharmaceutical Sector’s Concerns: The pharmaceutical industry is seeking a clearer strategy from the EU to enable more local production and address regulatory issues that have hindered clinical trials in Europe.
• Scrap Metal Shortage: The shortage of aluminum and steel scrap for recycling is a growing concern, and the European Commission is considering export duties on scrap sales to mitigate this issue.
• European Content Quotas: Thyssenkrupp Steel Europe advocates for binding minimum quotas of European content in procurement to support the EU steel industry and reduce reliance on imports.
• Urgency for Unified EU Action: Industry leaders and the European Commission are working together to craft a unified strategy to counter the negative impact of U.S. tariffs and secure Europe’s economic future in an increasingly protectionist world.
As these discussions progress, it is clear that coordinated action between European industry stakeholders and policymakers will be essential for ensuring the EU’s continued competitiveness on the global stage. The outcome of these talks will play a critical role in shaping Europe’s trade policy and economic stability in the coming years.
