2 June 2025 – On Friday, the US President announced his intention to raise US tariffs on steel and aluminium from 25% to 50%. Could Europe be the reason for this? Base metals on the LME proved resilient on Monday and, despite possible tariff increases, were largely positive and posted gains at the start of trading.
Base metals prove resilient on Monday
Base metals showed resilience at the start of trading on Monday on the LME commodities exchange despite the announcement of higher US tariffs on steel and aluminium. LME nickel rose by around 1% shortly after the start of trading, while copper, lead and zinc gained between 0.47% and 0.92%. Only aluminium is currently moving sideways.
The German DAX stock index was also unimpressed and is currently moving sideways with a marginal decline of 0.3%, just below the 24,000-point mark.
US President wants to sharply increase steel and aluminium tariffs
US President Donald Trump’s announcement last Friday that he intends to raise tariffs on steel and aluminium imports from the current 25% to 50% has set the usual press machinery in motion, particularly among European steel makers. Original quote: US tariffs are placing a massive burden on European steel, threatening the entire industry. The German steel association Wirtschaftsvereinigung Stahl (WV Stahl) is particularly vocal in this regard.
German WV Stahl calls for further trade defence measures for the EU
WV Stahl had already published a statement on Sunday regarding the tariffs, which have only been announced so far, and had been mentioned repeatedly in the media. With one million tonnes of steel exports to the United States per year, Germany is by far the largest exporter in the EU. The association therefore titled its statement ‘Doubling of US tariffs puts European steel industry under massive pressure’ and called for an immediate response from the German government in Berlin and from Brussels.
Once again, there were calls for new trade defence measures in the EU, the swan song for the entire domestic steel industry, and the argument that this would increase import pressure from other countries to Europe. This time, however, there was no traditional reference to Chinese overcapacity, but rather to steel imports from Russia, which reportedly supplies 3 to 4 million tonnes of steel annually.
In its statement, WV Stahl carefully avoided mentioning that these are so-called steel slabs, which have not been subject to any trade defence measures or safeguard tariffs to date. Slabs are primarily used by EU steel makers themselves for the production of hot-rolled coil and other processed products – so it is clear who is likely to have benefited most from these Russian imports.
Flood of steel imports has failed to materialise
For years, WV Stahl has repeatedly called for a tightening of existing trade defence measures in dozens of cases, wants a successor regulation for the EU safeguard measure on steel and has actively campaigned for the introduction of the Carbon Border Tax CBAM.
However, the predicted flood of steel imports into Europe has failed to materialise since 2018. Even in the black swan year of 2021, steel imports into the EU did not reach the level of 2018 and have decreased by an average of 15% since 2019. This can be proven beyond doubt with the figures from the EU safeguard investigations of recent years.
Is every third tonne of steel imported into the EU?
The claim by WV Stahl that every third tonne of steel is now imported is likely to be yet another case of statistical sleight of hand. Based on the latest EU Safeguard Review results and with a total consumption of 144 million tonnes of steel in the EU and imports of approximately 30 million MT in 2024, that would be just under 21% – so there is more than just a few percentage points missing to be able to claim that every third tonne of steel is imported.
Overprotected EU steel industry
At the same time, the EU steel industry is protected by increasingly restrictive trade defence measures. Not only does it enjoy protection through extensive anti-dumping and anti-subsidy tariffs, but also through a 25% safeguard tariff. From 2026, CO2 levies on imports will be added at a level that is not yet known, which, together with bureaucratic costs, could add up to another 25%.
Are EU steel makers responsible for the tightening of US tariffs?
Even though we do not welcome the possible increase in US tariffs on steel and aluminium to 50% and consider this to be counterproductive for the US economy and free world trade, European steel makers and their influential associations such as WV Stahl and EUROFER should ask themselves how much their constant demands for direct and indirect trade defence measures have contributed to this reaction by the US President. Some time ago, US President Donald Trump cited EU steel exports to the United States as one of the main reasons for tightening Section 232 tariffs.
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