The European Union plans to double the duty on steel imports to 50%, matching the tariffs being levied in the US in an effort to preserve the 27-nation bloc’s heavy industry. It also plans to cut by nearly half the volume of steel that’s allowed in before the higher rate takes effect.
While Europe’s steel industry has been demanding tighter measures for months, policymakers are coming around because of the risk that manufacturing could shift outside the bloc. Some leaders have also pointed to steel’s importance for arms manufacturing. “Our reality today and tomorrow is security and security means armaments and armaments means steel,” Polish Prime Minister Donald Tusk told us yesterday.
European steelmakers shifting to cleaner but more costly production methods are facing twin challenges from Beijing and Washington. US markets have narrowed after the Trump administration imposed its own tariffs on imports. Meanwhile, Chinese overcapacity threatens to swamp EU markets already losing share in key industries.
The knock-on impact from the EU steel duties could spread far and wide. Ukraine steelmaker Metinvest, owned by billionaire Rinat Akhmetov, is trying to extend the maturity of its debt. New hurdles to selling next door will be of interest to creditors. At home in the EU, steel-hungry companies like Siemens Energy, which is already bumping against the limits of manufacturing capacity, may experience ripples in their supply chains.