4 June 2025 – US President Donald Trump signs tariff increase on steel and aluminium imports into the United States. Nickel and aluminium prices remain stable. Is the European stainless steel sector really facing an existential threat?
Steel and aluminium: US President signs tariff increase to 50%
On the evening of 3 June 2025, US President Donald Trump signed the increase in tariffs on steel and aluminium imports into the United States. This means that instead of the previous 25%, ad valorem tariffs of 50% will now be levied on steel and aluminium products, as well as proportionally on products made from them, upon import. The tariff increase is to take effect today, 4 June 2025.
United Kingdom is the only exception
The only exception is the United Kingdom, where the previous 25% Section 232 tariffs will remain in force due to the trade deal not yet being finalised and will only be adjusted once the deal is complete. However, the text of the proclamation contains a clear, albeit indirect, warning to the United Kingdom. If it fails to comply with the agreements or does not implement them consistently enough, the Secretary of Commerce is authorised to impose tariffs of up to 50% on steel and aluminium from the UK.
European Union still lagging far behind
In recent months, the European Union has not really distinguished itself with its willingness to reach a quick negotiated solution. As it now appears, the British initiative in this regard has already paid off. Even if not all the details seem to have been finalised yet, Prime Minister Keir Starmer and his negotiating team have proven that it is possible to reach a deal with Donald Trump. This would probably have spared the EU an increase in tariffs.
Unfortunately, in recent months, the European Union has only responded to the changes in the United States with familiar patterns, calling for new trade defence measures, enacting regulations that disadvantage SMEs, or distributing further billions of euros to already oversubsidised steelworks.
Where is the political power of the EU steel makers?
It is also clear that the alleged political power of the mostly multinational steel makers in the EU was not used to persuade the Commission or the member states to negotiate deals with Donald Trump. This is because it is easier to demand unnecessary market protection and further subsidies and to enforce them in the EU than to produce steel and stainless steel there themselves. But it is also because most domestic steel makers are multinational corporations that also operate large mills in the United States. If you put two and two together here, you should be able to understand quite a bit!
Nickel and aluminium prices remain stable
Nickel and aluminium prices continue to defy the increase in US Section 232 tariffs. Prices have proven resilient since the announcement and now that the proclamation has been signed by the US president. Aluminium and nickel prices scored slightly positive gains in Asia today. The two metals also performed well on the LME at the start of trading.
European stainless steel sector facing an existential threat?
Once again, we were astonished to hear the latest statement from a so-called consulting firm that European stainless steel production is (once again) facing an existential threat and warned against imports to Europe. Allegedly, Europe could even lose its entire stainless steel supply chain. This is a very questionable position, especially since many of this consulting firm’s clients are not only individual stainless steel mills, but also, in the majority, traditional small and medium-sized enterprises.
EU with significant stainless steel underproduction
European stainless steel mills have done nothing to expand their EAF-AOD capacities over the past 15 years. Their current crude stainless steel production capacities have been utilised at an average of 95% since 2013. Even the EU Joint Research Centre found in 2024 and again in 2025 that the European Union is dependent on stainless steel imports of at least one million tonnes per year due to a lack of production capacity. The JRC now even places stainless steel close to the Union’s Critical Raw Materials Act and assigns stainless steel the highest import dependency of all relevant steel products.
Stainless steel scrap shortage exacerbated by trade defence measures
The current review of the EU safeguard measure on certain steel products has shown that the European economy is heavily dependent on stainless steel imports. And the continuing shortage of stainless steel scrap, exacerbated by questionable trade defence measures, has led to domestic stainless steel mills importing hundreds of thousands of tonnes of stainless steel slabs from Indonesia, among other places, thereby circumventing their own market protection and becoming the largest importers of stainless steel in the EU.
So instead of singing exclusively from the stainless steel mills’ hymn sheet, we would very much welcome it if this consultancy firm would advocate at least as vehemently for the disadvantaged metal-processing SMEs. After all, the downstream industry in the EU is heavily dependent on imports of stainless steel.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
