16 July 2026 – More protection, more tariffs, more subsidies: with its protectionism spiral turning ever faster, Europe is increasingly driving itself into economic irrelevance, while the real winner in the tariff race lies elsewhere entirely.
The Protectionism Spiral: When Europe Protects Itself into Poverty
The EU steel tariffs had barely been announced in October 2025 when the first voices were raised: the tariffs also had to be extended to downstream products. Even some importer associations had given in to this reflex and loudly called for further tariffs.
Let us be honest: this was not about protection. It was about revenge. “If we are being driven out of competitiveness, then everyone else must be punished as well.”
The same pattern is now repeating itself with CBAM. Barely introduced, the political reflex is already clear: expand it, tighten it, and apply it to the next stage of processing.
Machinery Manufacturers Join In
European machinery manufacturers have now also embraced this logic and further toughened their political position paper: more protection from Chinese competition, more instruments, more barriers.
At the same time, Denis Redonnet, the European Commission’s Chief Trade Enforcement Officer, announced that Brussels would “continue in the coming months, where necessary and justified, to take both structural and situational trade defence measures.”
And when the political will exists, Brussels is always happy to draw on ever broader narratives to support it.
Thorsten Gerber, CEO of Gerber Group, comments drily: “The EU has developed a remarkable ability to answer every problem with the same solution: more protection, more tariffs, more bureaucracy. At some point, we will have protected ourselves so thoroughly that there will be nothing left to protect.”
The Protectionism Spiral Follows Its Own Logic to the End
Has anyone in Brussels actually thought this protectionism through to its logical conclusion?
The logic is simple: tariffs on steel increase costs for machinery manufacturers. Machinery manufacturers demand protection. Protective measures for machinery increase costs for plant operators. They then demand protection as well.
Stage by stage along the value chain, the spiral continues to turn until, in the end, citizens are left to pay the bill and export markets are lost.
In the End, the Market Pays the Price
If Europe erects barriers at every stage, it will eventually stop exporting as well. For Asian competitors, that would be a gift: artificially overpriced European products would disappear from markets in the United States, Brazil, Japan, and Australia.
Without export revenues, there is no capital to finance raw material imports. And no recycling system or Critical Raw Materials Act in the world can turn a resource-poor continent into a self-sufficient one.
Europe is currently protecting itself into irrelevance.
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