EU Steel Industry Reels as Trump Tariff Remains Despite Outline Trade Deal with US

The hopes of European steel producers for immediate tariff relief were dashed as the latest draft trade agreement between the European Union and the United States left Donald Trump’s 50 per cent steel import levy untouched. This stands as a critical setback for one of the continent’s industrial backbones, already beleaguered by soaring energy prices and aggressive pricing from Chinese competitors.

Following reports from Brussels, diplomats confirmed that while a baseline 15 per cent tariff would apply to a broad range of EU exports to the US, steel was specifically singled out to continue facing the punitive 50 per cent duty. The UK, by contrast, currently pays only 25 per cent on its steel exports and has secured a future reduction to zero as part of its separate agreement, putting EU exporters at a distinct disadvantage.

EU officials are said to be lobbying for a compromise, such as limiting the highest tariffs to volumes exceeding an agreed quota, but the current outline deal signals little relief for an industry described as facing a catastrophic outlook. Eurofer, the EU’s lead steel trade body, has warned that the transatlantic duties, when combined with stiff energy costs and an influx of cheap steel diverted from the US, could devastate European mills.

The ongoing trade tensions arrive as the European Commission grapples with deeper questions of global competitiveness and fair play, especially regarding China. Commission President Ursula von der Leyen pointed to significant structural imbalances in trade flows, citing state subsidies and market distortions favouring Chinese exports. China’s President Xi Jinping, meanwhile, urged mutual strategic understanding while feuding over rare earth mineral exports vital to the automotive industry.

Despite hints of progress on some trade bottlenecks, such as securing rare earth supplies crucial for German carmakers, the overarching threat of heavy US tariffs stirs anxiety for EU policymakers. Germany’s Chancellor Friedrich Merz is reportedly seeking urgent dialogue to protect manufacturing jobs, amidst warnings that export markets and investment stability are at risk if the impasse continues.

European financial authorities remained cautious, with the European Central Bank deciding to hold interest rates steady while assessing potential economic shocks from the US trade policy. Leaders across the bloc are under acute pressure to strike a deal safeguarding industrial competitiveness, as the spectre of lost markets and job losses looms.