EUROFER President Voices Alarm Over U.S. Steel Tariffs and Their Impact on European Market
In a recent statement, Dr. Henrik Adam, President of the European Steel Association, condemned U.S. President Donald Trump’s Executive Order imposing a 25% blanket tariff on all steel imports, marking a significant escalation in the ongoing trade tensions. This move, according to Adam, will exacerbate an already challenging environment for the European steel industry, further compounding the effects of the trade war initiated during Trump’s first administration.
The Threat of Expiring Exemptions and Tariff Rate Quotas
Under the implementation of Section 232 tariffs during Trump’s first term, European steel producers were granted certain exemptions and a Tariff Rate Quota arrangement, designed to protect European exports while imposing restrictions. However, despite these exemptions, the U.S. still saw a reduction of over 1 million metric tons of EU steel imports per year.
The latest action, which removes all product exemptions and TRQs, poses a massive threat to Europe’s steel industry. Adam estimates that the EU could lose up to 3.7 million metric tons of steel exports to the U.S., which represents a 16% share of total EU steel exports in 2024. The loss of such a significant market cannot easily be compensated by alternative global markets, particularly given the trade protectionism and increased tariffs seen in other regions.
The United States is the second-largest export market for EU steel producers, and a loss of this scale will not only lead to reduced revenues but will also cause significant disruption to the supply chain and overall market stability.
Increased Risk of Trade Flow Distortions
The new tariff is likely to provoke shifts in global steel trade flows. In 2024, the U.S. imported around 23 million metric tons of steel from countries outside the EU, and much of this volume could now be redirected to the European market. This potential surge of imported steel, mainly from Asia, North Africa, and the Middle East, threatens to further destabilize the EU steel sector.
The EU is already grappling with global steel overcapacity, with large volumes of cheap steel flooding its markets, putting downward pressure on prices and profitability. The result has been a severe impact on investment in the green transition towards sustainable steel production and, consequently, a de-industrialization process within Europe.
The Steel Industry's Struggles in Europe: Capacity Closures and Job Losses
In 2024, the EU steel industry was forced to close 9 million metric tons of steel production capacity, leading to over 18,000 job cuts. These closures are attributed to a combination of factors, including the imposition of global tariffs, increased trade distortions, and price fluctuations. Dr. Adam warns that the U.S. steel tariffs will only further intensify these challenges, increasing the risk of further capacity idling and even more closures in the European steel sector.
This dramatic loss of production capacity could prove catastrophic, not just for the steel industry itself but also for the broader European economy, which relies heavily on manufacturing and industrial output. The situation has become so dire that the need for urgent and decisive action by the European Union to protect and preserve the steel industry has never been more urgent.
Call for Action: EU Safeguard Revisions and Comprehensive Tariffs
In light of these challenges, Dr. Adam has called for immediate revisions to the EU safeguard regime, which was originally implemented in response to Trump’s Section 232 tariffs in 2018. The EU safeguard measure, which is designed to contain the impact of steel deflection into European markets, has become less effective over time due to increasing import quotas and decreasing demand for steel. Adam stressed the need for impactful revisions to ensure that it addresses the dramatic market conditions now facing the steel industry.
The EU safeguard is set to expire in June 2026, and Dr. Adam called for the continuation of a comprehensive tariffication system to protect against the worsening issue of global steel overcapacity. This system would help avoid further damage to the EU’s steel sector by ensuring that excessive and subsidized steel imports do not flood the market, displacing European producers.
Dr. Adam also emphasized that the World Trade Organization rules do not prohibit such a tariffication system, making it a viable and necessary course of action. Without these crucial steps, he warned that U.S. tariffs would likely lead to even further capacity closures and a steep decline in European steel production.
The Urgency of EU Steel Protection
As global steel protectionism continues to rise and trade imbalances worsen, Dr. Adam’s statement underscores the urgency for a proactive EU strategy to shield its steel industry from the negative effects of the U.S. tariffs. The European Commission must act swiftly to ensure that European steel producers can continue to compete fairly in a market where global trade flows are increasingly distorted.
In closing, EUROFER calls for stronger and more effective safeguards to support the EU steel industry amid rising global protectionism and the threat of continued market disruptions. The loss of a significant portion of the U.S. market for European steel could have far-reaching consequences for both steel producers and workers in Europe, and the industry is at a pivotal juncture where strong, decisive action is essential for its long-term survival and competitiveness.
