EU and UK Could Lose Significant Chunks of Steel Exports in View of Tariffs

On February, President Donald Trump announced the return of 25% tariffs for any imported steel and aluminum goods to protect domestic production and tackle global overcapacity. The move created quite a stir in the markets, and according to experts, it could have a negative impact on the broader economy.

Since no foreign country will be exempt from the new tariffs, the EU and UK, both of which had exemptions before. As a result, the EU can lose a significant chunk of its steel exports to the United States, which is its biggest market. The UK could also lose nearly $500 million (£400 million) of steel exports, with the country exporting 200,000 tons to the U.S. annually.

According to Eurofer (European Steel Association) president, Henrik Adam, Europe’s steel production industry might take a huge hit because of the tariffs. He predicts that if the EU loses the product exemptions and TRQs, it will lose a staggering 3.7 million megatons of steel exports. 

This is a big problem for the Union’s struggling steel industry, which already sees increased competition from cheaper imports. The tariffs could worsen the issue by diverting huge amounts of steel destined for the U.S. to the EU. However, according to a steel service center in Germany, steel safeguards will protect the EU from imports.

Meanwhile, UK Steel announced via statement that countries should work together with the U.S. to tackle global steel overcapacity and unfair trade, which also influences the UK’s production.

Retaliatory tariffs from the EU are also in the works. European Commission President Ursula von der Leyen was adamant that the EU would do everything to protect its interests. “I deeply regret the US decision to impose tariffs on European steel and aluminum exports,” she said on February 11. “Tariffs are taxes – bad for business, worse for consumers… The EU will act to safeguard its economic interests. We will protect our workers, businesses, and consumers,” she said.

However, the UK’s trade minister, Douglas Alexander, said that the UK won’t have an immediate response to the tariffs.

Photo by Blaz Erzetic on Unsplash