“Donald Trump’s customs policy has driven a trench through international steel trade,” writes Austrian author Gerhard Popp in a contribution to online portal „Immobilien-Redaktion“. What began as “America First” rhetoric has become a tectonic shift for steel and its closest customer industries – mechanical engineering, construction and automotive, all of which are losing sales volume to the USA. And, worse, Europe must cope with even more cheap steel imports from Asia, which cannot land in the US any more, and must seek other shores.
The macabre consequence is that Europe itself has to raise walls to protect its industries. European steel association Eurofer underscores this urgency with the latest data. Despite weak demand, EU steel imports reached their highest level on record at the end of 2025, surging to around 9.9 million tonnes in the final quarter alone, up from 7.4 million tonnes a year earlier. At the same time, import penetration has climbed sharply, with flat steel products now accounting for around one-third of the EU market. As a consequence, European steel capacity has been idled or closed, leading to job losses and putting the industry’s viability at risk.
The pressure is being driven by massive global steel overcapacity, now estimated at around 650 million tonnes, combined with state-backed overproduction and rising protectionism in major producer countries, including the introduction of 50% tariffs by the United States.
The new trade measure agreed upon by the European Council, Parliament and Commission, introduces a strengthened tariff-rate quota (TRQ) system, designed to restrict imports while keeping the EU market open. In its essence, it grants tariff-free quotas for the first 18.3 million tonnes of steel per year, with a 50% tariff (up from 25%) on all imports above this quota, avoiding blanket import restrictions.
Europe’s other massive measure to limit imports is the international equivalent to the European Emissions Trading System (ETS), the Carbon Border Adjustment Mechanism (CBAM). In April, the Commission announced an initial price for CBAM certificates of €75.36 imposed retroactively for the first quarter 2026. Although European mills, and many players on other levels of the steel value chain, welcome CBAM in general, they are not happy about the “nightmare of bureaucracy” it brings. Particularly smaller companies can hardly handle the additional accounting work. And anyway, few people even really understand how CBAM works, and how to work with it.
Europe in the slow lane
Bureaucracy and long waiting times seem to be more of a European problem than they are elsewhere.
Players bemoan that the European Commission is too slow supporting its industries and raised their voices at the Handelsblatt “Zukunft Stahl” conference in Essen in March.
SSAB chief executive Johnny Sjöström, who previously worked in the USA as well as in China, remarked that in those countries, it takes only six months to lay a new power line, “whereas in Öxelesund we needed nine years to get it approved”. This involves decisions, reversals and appellations at various instances in the political approval process. “This is a bureaucracy we need to overcome,” he said at the event.
Former Salzgitter CEO Hansjörg Fuhrmann, who participated at the conference as an attendee, pointed at the “very different timeline they have in India”, compared with “man-made regulations” slowing down decisions in Europe.
This was confirmed by voestalpine Steel Division head Hubert Zajicek, who spoke of impressions he has gained of different countries from his experience as worldsteel executive committee member. “It is nonsense to believe that we Europeans can detach our economic ecosystem (with its numerous regulations) from the rest of the world,” he said.
To a lesser extent, Europe also lags behind in pace of business processes such as consolidation, said Guido Kerkhoff, CEO of Klöckner & Co, which has expanded vastly in the USA. Stateside, the process for making acquisitions and expansions takes one third to one half the effort required in Europe. “After all, you are considered the good guy when you come investing,” he stated.
Sjöström also pointed out a particularly uneasy case in which speed can be crucial. European armed forces standardising and approving the construction of tanks is a lengthy process, meaning Europe’s total production of tanks does not exceed 50 units per year – versus 500 made in Russia in the same time.
“Buy European”, except for steel
Another initiative, the Industrial Accelerator Act (IAA), launched upon demand from manufacturing industries stopped strangely short of including steel. The IAA proposal presented by the European Commission April failed to implement a general “Buy European” rule, and for that came under attack of Eurofer, Germany’s steel association Wirtschaftsvereinigung (WV) Stahl and workers union IG Metall. In contrast to other materials, namely aluminium and concrete, the Commission’s 25%-quota for carbon-reduced materials in public tenders does not ask for European origin for steel as well.
“War and protectionist moves have made Europe’s dependency in strategic regards painfully visible,” say managing director of WV Stahl, Kerstin-Maria Rippel, and IG Metall’s deputy chairman Jurgen Kerner. “Resilience of Europe’s economy is becoming a necessity for security,” they are reported as saying in a guest article in “Welt”. The failure of linking the green steel quota to domestic sourcing “means a surrendering of Europe as a producer region,” which ultimately is “a political error of historic dimensions,” they conclude. They clarify that their claim “is not about raising walls, it’s about self-assertion.” Pointing at the policies of the USA and India, they note that “only a naive continent refrains voluntarily from linking demand to domestic production, to support its own strength.”
Europeans should rethink alliances
European steel industry players are being confronted with a multitude of unprecedented risks and therefore may want to rethink their alliances and the value of trusted partnerships, participants at the Wire & Tube trade fair in Düsseldorf said.
The industry is being shaken by “exogenous shocks”, Ralf Winterfeld of German stainless distributors organisation EHV (Edelstahl-Handelsverband) said in a presentation on the status of the stainless-steel economy after Covid.
“Following a decline in prices throughout 2025, alloy surcharges for ASTM 304 have risen by 16% since January and stabilised sales prices,” he said. “By contrast, the slightly positive macroeconomic forecasts issued in February by German economic institutes like IFO have already been nixed, not only by the war in Iran,” Winterfeld said. In response to a question on the impact on traders of CBAM and the proposed new EU steel trade measure, Winterfeld said: “You will have to rethink your sourcing completely.”
Along similar lines, Uwe Reinecke of rebar maker Feralpi Stahl recommended that businesses should look for opportunities amid the chaos. He said that the unpredictability of US president Donald Trump should spur Europe to find new friends and partners in other parts of the world. The trust in the USA could be shaken into the next presidency, he fears. “Europe needs to use the momentum of the moment for new alliances, or we will die along with our wealth,” he concluded.
Author
Christian Koehl (Source: Christian Koehl)
