U.S. tariffs, EU vulnerability
The United States has imposed prohibitive 50% tariffs on steel and its derivatives, shutting European producers out of its major export market. Despite months of negotiations, no solution emerged: the U.S.-EU Joint Statement contains only vague commitments, offering no clear engagements or deadlines for the U.S. – despite the EU’s efforts until the very last moment. This limbo is more than a commercial blow; it exposes a strategic vulnerability.
At home, the challenge is no less urgent. Europe continues to face surges of cheap, carbon-intensive steel imports from countries with massive overcapacity, heavy state support, and far weaker climate, environmental and labour standards. The current EU safeguard mechanism, introduced in 2018 to shield the European market from trade deflection caused by the first round of Trump tariffs at 25%, has failed to prevent imports from taking EU market share, leading to idling and closures of steel capacities across Europe.
The figures speak for themselves: from 2018 to 2024, EU steel production has lost 31 million tonnes in exports and domestic consumption, while imports continued to flood the bloc, driven by excess capacity worldwide— particularly in Asia, North Africa and the Middle East. Global overcapacity has skyrocketed to over 600 million tonnes in 2024 and is projected to reach 721 million tonnes in 2027, five times the total EU steel production.
Prices are depressed, decarbonisation investments delayed, and tens of thousands of EU jobs are at risk across steel regions – only last year 18,000 layoffs were announced with a record 12 million tonnes of capacity closures, adding to the 100,000 job losses and 26 million tonnes of capacity closures between 2008 and 2023. Now, at least another 5 million tonnes of EU steel production are at risk because of the effect of U.S. tariffs on EU exports.
Act now or (forever) lose ground
The European Commission has recognised the problem: the Steel and Metals Action Plan (SMAP) promised a “highly effective trade measure” to replace the safeguard. This promise must now be delivered, even more so as the State of the European Union (SOTEU) 2025 sets the political agenda for Europe’s industrial and trade priorities for the months to come.
A strong new trade measure must:
- Reverse import increases and levels. Based on a new Tariff-Rate Quota (TRQ) regime—and not blanket tariffs such as those applied by the U.S.—it needs to support viable capacity utilisation, reflecting the dynamics of different steel segments. To ensure high effectiveness, the quota should apply to all third countries without exemption or preferential treatment, and cover all steel products to avoid loopholes or discrimination. In addition, the above-quota tariff must be set sufficiently high, taking into account the 50% U.S. steel tariff level, to prevent deflection into the EU market. An additional 23 million tonnes of imports now de facto ‘banned’ from the U.S. market are already increasing this risk.
- Support decarbonisation investments. Europe’s steelmakers are investing billions in innovative hydrogen-based, clean and circular steelmaking. They need market stability, legal certainty and legislative predictability for investment return. The new trade measure should reduce currently ‘doped’ import levels to traditional levels such as those of 2012–2013, prevent future sudden import surges, and therefore give Europe’s industry the necessary confidence to continue green projects.
- Ringfence against global overcapacity. The measure should demonstrate Europe’s seriousness in tackling steel excess capacity, which is no longer a seasonal phenomenon but has become a structural problem. This could also constitute common ground for restarting cooperation with the U.S.
Defending steel supports the whole value chain
Critics may warn of higher costs for downstream industries. The reality is the opposite: without a viable, innovative and green European steel sector, carmakers, construction, machinery, home appliances and renewable industries will also progressively disappear and be replaced by foreign suppliers that do not share our climate, social and security standards. This is already happening: since 2020, the EU has become a net importer of steel-intensive products. Cheap steel imports today are already destroying the industrial base of tomorrow and undermining Europe’s transition.
Exactly one year ago, the Draghi Report sent a clear warning: competitiveness, climate, trade, energy, security and Europe’s prosperity are all interconnected. However, its recommendations have not yet been implemented. Europe’s industrial leadership moves closer to the brink every day.
Europe’s steel test
Europe cannot control Washington’s tariffs nor Beijing’s subsidies, but it can defend its own market. The question is simple: after years of ineffective safeguards and global market distortions, will the EU finally deliver a steel trade measure that works?
Europe’s steelmakers are not asking for favours. They are asking for a level playing field – one that allows them to compete fairly, invest in decarbonisation, boost innovation and secure tens of thousands of quality jobs. Preserving Europe’s steel is not just about one industry; it is about Europe’s industrial base, prosperity and climate leadership. The European Union itself was born out of steel. Today, the EU’s choice on a robust steel trade measure will determine whether that foundation remains strong.
Europe can only be #StrongerWithEUSteel—but only a strong EU steel trade measure can #SaveEUSteel.
Axel Eggert is the Director General of The European Steel Association (EUROFER).
