Statement on U.S. steel tariffs by EUROFER President, Dr. Henrik Adam

Section:

Euro & Finance

Brussels, 11 February 2025

“The Executive Order signed by U.S. President Donald Trump imposing a 25% blanket tariff on all steel imports is a radical escalation of the trade war launched under his first administration. It will further worsen the situation of the European steel industry, exacerbating an already dire market environment.

Under the current implementation of Section 232, European steel producers had exemptions and the European Commission had negotiated a Tariff Rate Quota (TRQ). Despite exemptions and the TRQ, EU steel imports in the U.S. decreased by over 1 million tonnes per year.

If all product exemptions and TRQs are now removed, the EU could lose up to 3.7 million tonnes of steel exports to the U.S. The U.S. is the second biggest export market for EU steel producers, representing 16% of the total EU steel exports in 2024. Losing a significant part of these exports cannot be compensated by EU exports to other markets.

Additionally, this move risks causing new, significant trade flow deviations. In 2024, the U.S. imported about 23 million tonnes of steel products from third countries other than the EU. These volumes are now likely to be massively diverted into the European market.

Already today global steel overcapacity is being off-loaded massively on the vulnerable EU steel market at very cheap prices, mainly from Asia, North-Africa and the Middle East. This is leading to the inability to invest in the green transition and ultimately de-industrialisation of Europe. In 2024 alone, the EU steel industry had to close 9 million tonnes of capacity with over 18,000 job cuts announced. The Executive Order by President Trump will inevitably further exacerbate the situation.

The need for decisive EU action to preserve the European steel industry becomes even more urgent. Key measures we are expecting from the EU are:

The revision of the current EU safeguard regime with impactful measures as a matter of urgency to reflect the dramatic market and trade conditions. The EU safeguard was set up to contain the deflection caused by the first Section 232 action in 2018, but over the past six years, the safeguard has lost its effectiveness due to the increase of quota in the face of decreasing demand, by allowing imports to gain significant market shares in the EU.

The continuation of a comprehensive tariffication system as an absolute necessity, as the current EU safeguard measure will terminate in less than a year and a half (end of June 2026) while global steel excess capacity is worsening and steel protectionism is increasing worldwide. It is important to note that WTO rules do not prohibit comprehensive tariffication as such.

Without an immediate tightening of the current safeguard quota regime, the deflection provoked by the new U.S. steel tariffs will inevitably push EU steel capacity into additional idling and, ultimately, closure.”