The steel industry needs a trade policy safeguard

by Hans Diederichs

Even before the Corona crisis, the steel industry was already facing considerable challenges, especially in Germany as a steel location. The corona pandemic is now plunging the industry into an intensified crisis. The German government and the federal states adopted measures to alleviate the liquidity problems and stabilize employment. However, with regard to the steel industry, these measures can only have the desired effect if they are supplemented by more far-reaching measures in this special crisis situation. Trade policy, and in particular the safeguards, has a key role to play in this respect.

Steel demand in the EU is currently collapsing dramatically. Similar developments are also evident in other countries. While producers in the EU are responding to the changed situation by adjusting their production or preparing for it on an individual basis, in other countries steel production is even being expanded in some cases. This applies in particular to China, where crude steel production was expanded in the first quarter despite a deep economic slump. As a result, substantial inventories have been and are being built up which will push onto the world markets when demand picks up again. Should the extremely fragile situation on the markets in the foreseeable future lead to a worsening of the import crisis in the EU, this could cause lasting damage not only to Germany as a steelmaking location but also to the entire industrial value chain.

IG Metall and WV Stahl therefore consider it imperative to make comprehensive adjustments to the safeguards in a timely manner to reflect the changed situation on the markets. In this historically unique situation, other countries must not be allowed to unload their structural problems on the European steel market and thus on the backs of the employees in the EU steel industry in the current crisis.

Source: WV Stahl                      Photo: IG Metall

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