The ramifications of the new US tariffs are alarming with the EU could lose up to 3.7 million mt of steel exports to the U.S. if all product exemptions and TRQs are now removed, Henrik Adam, Eurofer President said issuing a stark warning regarding the impact President Donald Trump’s decision to impose tariffs on all steel and aluminum imports.
The new US duties will be enforced “without exceptions or exemptions”, Trump declared on Feb. 10 and they are expecting to come into force after the beginning of March.
According to Eurofer President Henrik Adam the US government’s decision to impose a blanket 25% tariff on all steel imports represents a radical escalation in the trade war that began during his first previous administration. Adam emphasized that this move could worsen an already dire situation for European steel producers. The European Commission secured exemptions and negotiated a Tariff Rate Quota (TRQ) for EU steel imports; however, even with these measures, EU steel exports to the U.S. have decreased by over one million mt per year.
The U.S. is the second biggest export market for EU steel producers, representing 16% of the total EU steel exports in 2024. According to Eurofer aggregate data in 2018, the total exports from EU to US were approximately 3.276 million mt, which peaked at 3.352 million mt in 2022. However, by 2024 year-to-date, exports are projected to be around 2.688 million mt, indicating a decline.
“Losing a significant part of these exports cannot be compensated by EU exports to other markets. Additionally, this move risks causing new, significant trade flow deviations. In 2024, the US imported about 23 million mt of steel products from third countries other than the EU. These volumes are now likely to be massively diverted into the European market.”
During the past safeguard period, the global steel market saw excess capacity increasing by nearly 50 million mt, from 514 million mt in 2019 up to close to 560 million mt in 2023. This volume is four times the total steel demand of the EU. Furthermore, according to the OECD, approximately 158 million mt of new capacity is potentially coming on stream until 2026, while steel demand is currently growing by only around 36 million mt/y. As opposed, the European steel industry has already closed 9 million mt of capacity in 2024, resulting in over 18,000 job losses.
Adam’s statement underscores the urgent need for decisive action from the EU to safeguard the European steel industry. Key measures expected from the EU include a revision of the current safeguard regime and the implementation of a comprehensive tariffication system to address the worsening market conditions.
Without immediate action, the EU steel industry risks further capacity idling and potential closures, exacerbating the challenges posed by the US tariffs.
EC reactions
In the main time, European Commission President Ursula von der Leyen on Tuesday vowed “firm and proportionate countermeasures” in response to Trump’s tariffs on all steel and aluminum imports.
Von der Leyen said in a statement that she deeply regretted the U.S. decision, adding tariffs were taxes that were bad for business and worse for consumers.
“Trump said the new duties are meant to crack down on the efforts of countries like Russia and China to circumvent existing duties, bolster domestic production, and bring more jobs back to the US. However, previous tariffs did not lead to increased domestic aluminum production,” ING Commodities Strategist, Ewa Manthey, and Head of Commodities Strategy, Warren Patterson comment on US President Donald Trump’s announcement underling how in 2024, the output of the US steel industry was 1% lower than it had been in 2017 before the introduction of the first round of tariffs by Trump, while the aluminum industry produced almost 10% less.
“Tariffs would result in higher aluminum prices in the US, representing a significant upside risk to the US Midwest premium this year. However, the effects on LME prices will be minimal. US tariffs previously had little impact on LME prices. Tariffs also risk demand destruction in the US as the extra costs would most likely be passed on to end consumers. The prospect of a global trade war is bearish for the LME aluminum price. Tariffs are bearish for industrial metals in terms of slowing global growth and keeping inflation higher for longer,” they said echoing also other analysts.
The Platts US aluminum Transaction premium hit a fresh nearly two-year high of 29 cents/lb plus LME cash, delivered Midwest, on Feb. 10, as uncertainty around the timing of imminent US tariffs on aluminum from all countries paralyzed trading. That is up from 28.15 cents/lb previously.
According to Platts, part of S&P Global Commodity Insights, the Platts US Hot-rolled coil price has seen a similar trajectory. Since Trump started to talk about tariffs after opening the year at $690/mt on Jan. 2, prices registered a stronger recovery of $60 to Feb. 7 to $750/mt and up by a further $25/mt since the proper announcement closing at $775/mt on Feb.10.
European hot-rolled prices ex-works Ruhr have gradually increased since the outset of 2025, as mills have issued higher offers, despite downstream demand fundamentals remaining largely weaker. Platts assessed the HRC ex-works Ruhr price at Eur592.50/mt on Feb. 10, an increase of Eur32.50 from Jan. 2.
