With Trumpian percentages and Trumpian explanations, the European Union is putting up a high wall for steel from the rest of the world. Steel imports will be subject to heavy import duties and quotas, if the European Commission has its way. Only in this way would the European steel industry be able to compete against cutthroat competition, especially from China.
“This is what the reindustrialization of Europe looks like,” Stéphane Séjourné, the European Commissioner for Industry, wrote on X on Tuesday afternoon. “I will make no excuses for standing up for our steel industry,” he told journalists in Strasbourg moments later.
“If we had not done this, within a few years we might not have had any industry left to serve crucial European sectors,” said his colleague Maros Sefcovic, European Commissioner for Trade.
The steel industry is having a hard time. Factories are running at half capacity. Cutbacks and layoffs hang over the market. That is why the EU has protected the steel sector in recent years with the help of a quota. Below a fixed ceiling, steel could be imported freely, above the ceiling levies of 25 percent came into effect.
If we had not done this, we might not have had our own industry left in a few years
These temporary measures, introduced in 2018, were intended as an emergency button after Donald Trump shielded the American market during his first presidential term. Nevertheless, thirty thousand jobs in the steel industry have been lost since that year, Sefcovic said on Tuesday.
With the new protective measures, the European steel sector is shielded even further, and permanently. The amount of steel that may be imported duty-free under the ceiling will be halved. The rate above this will be doubled to 50 percent.
Trump’s tariff wall
Unfair competition? On the contrary, says Séjourné. European steel companies are currently suffering from a skewed world market. EU officials point the finger at manufacturers elsewhere, who often produce large quantities of steel with the help of government subsidies and sell that steel at dumping prices in the EU.
The 27 EU countries and the European Parliament will consider the plan in the coming months. It is expected that many countries will support the Commission’s plans, although there are also some Member States where companies actually benefited from cheap imported steel.
The unrest in the steel sector has become even more acute since the United States erected an even higher tariff wall during Trump’s second presidency. This also concerns levies of 50 percent. Canada took similar measures. Cheap steel from elsewhere that previously ended up in these countries now finds its way to Europe even faster.
The Commission recognizes that domestic problems, such as high energy prices, also contribute to the deteriorating competitive position of the steel industry. Overall, the EU imports a growing share of its steel, now around a quarter of the total.
The intervention is indicative of the tilting European debate. As long as climate dominated the political conversation, the steel sector was considered a difficult case: a highly polluting form of industry, with little prospect of becoming climate-friendly in the short term. Green steel may be sustainable as a dream of the future – but it is currently expensive. See the rescue plans for Tata Steel, for which the Dutch government is contributing 2 billion euros.
Justified
Almost every politician now sounds concerned about the steel industry. If not because of the jobs at stake, then because of new priorities.
If the EU wants to boost its defense without being completely dependent on other parts of the world, it cannot do it without home-grown steel. Anyone who looks through geopolitical glasses will see that climate plans also benefit from a European steel industry. Wind turbines, solar panels, electric cars: they all need steel.
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Brussels is looking for ways to protect the steel sector against China
The European Commission says that the new measures do not conflict with agreements within the World Trade Organization, because action is justified in the event of market-disrupting activity. Moreover, the EU wants to show that it is willing to work together with the US against China.
On the other hand, other countries are anything but happy. In the United Kingdom, which exports the majority of its steel to the EU, concerns about the measures are already immense. According to lobby club UK Steel, the British steel industry is facing “the greatest crisis in history”.
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