Metallurgical redistribution: Europe closes the market to foreign suppliers
19 March 2025 21:00
In March 2025, the European Union (EU) announced its intention to cut steel import quotas by 15% starting April 1. This decision is aimed at preventing the influx of cheap steel into the European market after the United States imposed new tariffs on steel and aluminum imports, "Komersant Ukrainian" reports citing Reuters.
European steelmakers are already facing high energy prices and competition from Asia and other regions. They warn that the EU risks becoming a dumping ground for cheap steel diverted from the US market, which could lead to the closure of European plants.
Stefan Sejourne, the European Commission’s Executive Vice President for Prosperity and Industrial Strategy, said that with many countries citing national security and not complying with World Trade Organization (WTO) rules, the EU cannot remain the only continent to allow its industry to collapse. He predicts that producers from Canada, India and China will seek to increase supplies to Europe in light of the US imposing a 25% tariff on steel imports.
The CEO of the German industrial concern Thyssenkrupp, (the second largest steel producer in Europe), said that last year the US imported about 23 million metric tons of steel. Due to the new tariffs, these volumes are now looking for other markets, including Europe. Amid the news, shares of ArcelorMittal, the leading steel producer in Europe, rose by 0.9%.
The European Commission plans to introduce a number of measures aimed at supporting the steel industry as part of the new European Steel and Metals Action Plan. According to the draft plan, the EU is considering imposing import restrictions. The Commission also intends to consult with aluminum producers on the feasibility of a prompt investigation to introduce safeguard measures.
In his turn, Stefan Sejourne emphasized that the EU should anticipate future tensions, wars, and pandemics, given the past experience of dependence on Russian gas. He noted that the EU does not want to be dependent on steel imports, which will be crucial in rebuilding the military industry after the war in Ukraine.
To further strengthen existing trade protection measures, it is planned to revise public procurement rules in 2026 to favor European steel. The Commission will also introduce a “smelt and cast” rule to prevent the change of origin of metal through minimal processing.
In addition, in cooperation with the European Investment Bank, it plans to launch a pilot program to guarantee long-term electricity contracts, with priority for steel and aluminum producers. The details of this program will be announced in the second quarter of 2025.
Sejourne noted that the EU is committed to maintaining steel production in Europe and ensuring that it can be processed within the EU. He emphasized the strategic importance of steel, saying that without it, the defense and automotive industries, which the EU intends to preserve, would not exist.
European steel producers’ reaction to the EU action plan
ArcelorMittal CEO Aditya Mittal expressed support for the plan, noting that it takes into account the urgency of the situation and is ready to address key structural issues, including trade protection and shortcomings of the carbon import regulation mechanism. He emphasized the need to act quickly to stop unfair trade and dumping.
The conglomerate Thyssenkrupp Steel Europe called the action plan a “pioneering step” towards ensuring the competitiveness and decarbonization of the European steel industry. The company emphasized the importance of prioritizing trade protection to ensure a level playing field and job security.
The steel company Aperam supported the initiative to introduce long-term measures to protect the EU steel sector from the negative effects of overproduction in Asia after the current safeguard measures expire in June 2026. The company emphasized the need for rapid and effective implementation of the proposed measures.
Outokumpu (Finland) noted that the action plan recognizes the key role of steel in Europe and takes decisive action to strengthen its competitiveness. However, the company emphasized that there are still unresolved issues, such as global overcapacity and distortions from China and other countries, which require more decisive solutions.
Norwegian aluminum producer Hydro expressed concern that with the increase in aluminum tariffs, there is a risk of Europe becoming a dumping ground for aluminum producers looking for other markets. The company noted that this could lead to the EU introducing protective measures for aluminum.
International response to the EU’s measures
The European initiative to limit steel imports and tighten control over trade flows has sparked active discussions in the international arena. The EU’s main trading partners, including China, India and the United States, are closely monitoring the situation, assessing the possible consequences for their economies.
China has expressed concern that new EU restrictions could increase global trade tensions. Representatives of the Chinese Ministry of Commerce said that such measures could affect supply chains and make it more difficult for Chinese manufacturers to access the European market. The Chinese authorities are considering filing a complaint with the WTO, arguing that the EU’s actions are hidden protectionism.
TheUnited States, by imposing a 25% duty on steel imports, has redirected excess supplies of the metal to the European market. Washington welcomed Brussels’ steps to protect its steel industry, as it reduces pressure on American producers. However, some American companies supplying steel to Europe have expressed concern about possible quota cuts and tariff increases.
India, one of the largest steel exporters, is also looking at alternative markets as EU restrictions could severely impact the Indian steel industry. Indian officials have already begun consultations with Brussels to determine how much the new quotas will affect Indian steel shipments to Europe.
Other Asian countries, including South Korea, Japan and Vietnam, are also concerned about the prospect of restrictions on their supplies. South Korean companies, such as POSCO, have already announced a possible reduction in exports to the EU and the need to find new markets.
Economic consequences for Europe
The measures taken may have a double effect on the European economy. On the one hand, toughening trade barriers will help protect the domestic market from dumped supplies and support European producers. On the other hand, a reduction in imports could lead to higher steel prices, which would have a negative impact on the construction, engineering and automotive industries.
Economic analysts warn that the new restrictions may lead to a rise in prices for rolled metal products in the EU, which will increase production costs in key sectors of the economy. Companies involved in the construction and production of automobiles are already signaling the risks of higher prices for their final products.
At the same time, the EU’s plans to strengthen investment support for industry, including subsidies and tax breaks for steel companies, may partially offset the negative effects. The European authorities are confident that these measures will help maintain the industry’s competitiveness and reduce dependence on steel imports.
Long-term prospects and possible changes in the EU strategy
Experts predict that in the future, the EU may tighten its steel import regulation policy, especially if other countries continue to introduce new protectionist measures. The following steps are possible:
- intensification of anti-dumping investigations against countries supplying steel at low prices;
- additional restrictions on imports of metals other than steel (e.g., aluminum and copper);
- strengthening support measures for European producers, including government subsidies and tax breaks;
- expanding CBAM (carbon tax on imported products) to protect the domestic market.
According to experts, the introduction of new rules in the EU may be part of a global trend toward increasing trade barriers and intensifying competition for markets. In this context, further developments will depend on the reaction of the EU’s main trading partners and the ability of European producers to adapt to the new conditions.
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