Divisions grow over EU steel trade policy as lobbying escalates

Trade tensions within the European steel sector are increasing as steelmakers and importers take opposing positions on the future of the EU’s trade defence instruments. According to analysis published in the August edition of MEPS’s European Steel Review, lobbying efforts aimed at the European Commission have intensified following the announcement of a new EU-US trade deal.

Although the agreement introduced a reciprocal 15% tariff on certain goods, it did not alter the 50% US import duty on steel from the EU, originally introduced under Section 232. Industry association Eurofer warned that this situation places significant strain on the European steel industry and could effectively halt EU steel exports to the US, which reached 3.8 million tonnes in 2024.

Prior to the announcement, both EU and UK trade representatives had signalled hopes of establishing a quota system with the US that would allow a portion of steel exports to enter under reduced or zero tariffs. However, no such arrangement was included in the recent deal. In the UK, a 25% provisional tariff has been agreed, conditional on stricter domestic trade defence rules.

At the same time, importers in both regions are expressing frustration with increasing restrictions. In the UK, controversial revisions to safeguard quotas were only softened following direct ministerial intervention one day before the changes were due to take effect. In the EU, many importers have reportedly halted new orders this month due to the absence of key emissions data required for calculating the cost impact of the Carbon Border Adjustment Mechanism (CBAM), which is scheduled to apply from 1 January 2026.

According to MEPS, several market participants expect CBAM-related charges to be postponed to July 2026 or January 2027. A delay until 2027 would align the EU mechanism with the UK’s planned timeline. Ongoing discussions between the two sides aim to coordinate their respective Emissions Trading Systems and eliminate cross-border CBAM obligations.

In mid-July, a group of European importers submitted formal questions to the Commission, challenging the legal and practical feasibility of implementing CBAM in its current form. The group highlighted concerns over the lack of transparency and raised the possibility that uncertainty over emissions calculations could lead to competitive disadvantages or insolvency risks. Some stakeholders have called for exemptions for small and medium-sized enterprises.

Meanwhile, a coalition of 11 EU member states has submitted a so-called “non-paper” urging the Commission to accelerate the implementation of stricter import safeguards. Their proposal includes a 40–50% reduction in annual quota volumes and a doubling of above-quota duties from 25% to 50%, with effect from 1 January 2026 instead of mid-year.

The call for tougher protections comes as financial results from major EU producers show declining production and shrinking revenues. Salzgitter’s steel output dropped 7.4% year-on-year to 2.49 million tonnes in the first half of 2025, while its revenues fell 6.1% to €1.7 billion. According to MEPS data, average European hot-rolled coil prices dropped by over 10% in the first six months of the year.

Thyssenkrupp also adjusted its sales forecast downward in mid-July, citing weak demand and continued tariff barriers in the US. The company now expects annual sales to fall by 5–7%, compared to a previous estimate of 3%. Following the announcement, its share price fell by 7%. CEO Miguel Lopez described the current environment as shaped by “enormous macroeconomic uncertainty”.

With the steel industry facing sustained competitive pressure and regulatory shifts, the coming months may prove decisive in shaping Europe’s external trade posture and internal market balance.

Source: MEPS, Photo: Fotolia