15 October 2025 – Raise steel tariffs, expand CBAM, hand out billions in tax money as election gifts, nationalise steel mills: the Social Democrats (SPD) want to “save” Germany’s steel mills. But with their newly published position paper “Policy for a Future-Proof Steel Industry in Germany and Europe,” they are in fact declaring economic war on millions of small and medium-sized enterprises, the real backbone of the economy. “Social and fair for all”? The SPD seems not to care.
Steel: German Social Democrats call for nationalisation of steel mills
Here we go again. Germany’s Social Democratic Party (SPD) is calling for the nationalisation of domestic steel mills if industrial policy measures fail – according to a position paper released on Tuesday. The party also wants to impose a moratorium on mill closures and the shutdown of blast furnaces.
A state-controlled steel foundation is to take over the role of “rescuer of last resort” – though, unsurprisingly, the paper fails to mention that such a foundation could freely distribute subsidies to large corporations without oversight.
SPD’s industrial agenda: restricting the free market
The SPD’s industrial policy proposals make clear that nationalisation, presented as a “last resort”, is in reality not far off. Apart from new protectionist measures, such as higher import tariffs, an expansion of CBAM, and direct state intervention in the market, the Social Democrats have little else to offer.
They also want to extend the free allocation of CO2 certificates to steelmakers, a move clearly violating WTO rules and inconsistent with CBAM. That it would also be socially unfair? The SPD does not seem to care.
Handouts: billions in tax money to solve the problem
The rest of the plan relies on massive subsidies, financed by billions in taxpayer money from already strained public budgets. Conveniently, the party itself controls the finance ministry, perfectly positioned to lavish expensive election promises and cash gifts on its long-lost voter base.
Small and medium-sized enterprises? Not on the SPD’s radar
Predictably, the SPD’s paper completely ignores SMEs, which make up the core of Germany’s steel-consuming and value-adding industries. There is no mention of measures to strengthen the demand side, except for limited state-funded purchases of “green steel” – once again at the taxpayer’s expense.
Voluntary targets for emission reductions have already failed to cut CO2 per tonne of steel over the past decade, yet the SPD insists on the same approach.
SPD proposals will massively increase production costs
Instead of addressing competitiveness, the SPD wants to further raise production costs through tariffs and CBAM. And if that fails, as it has repeatedly for the past twenty years, the party’s fallback is nationalisation, a strategy that has never produced sustainable results in Germany.
Current calculations show that the EU’s planned measures under CBAM and new steel tariffs alone will raise production costs for small and medium-sized metalworking companies by over 15% – on top of the subsidies for steel mills that SMEs will pay for through their own taxes.
Final note
We urge everyone working in a small or medium-sized enterprise to think carefully about whether this agenda deserves support at the ballot box. This policy paper represents pure economic communism – and in communism, as history shows, there is no place for a middle class.
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