Europe to toughen protection for steel sector amid defense push

The EU is bolstering protections for steel as the bloc steps up its defense capabilities, after US President Donald Trump indicated that he’ll pare back the US’s traditional security arrangement with Europe. Bloomberg

The European Union will step up protection of its steel industry, as it tries to shield a sector that’s crucial for defense from tariffs, cheap imports and high energy prices.

The European Commission, the bloc’s executive branch, presented an action plan for steel on Wednesday. In the third quarter, it will propose a long-term replacement for its steel safeguard measure — effectively a quota system — that expires next year. The commission will also examine whether to take similar measures for the aluminum sector.

The EU is bolstering protections for steel as the bloc steps up its defense capabilities, after US President Donald Trump indicated that he’ll pare back the US’s traditional security arrangement with Europe. A battle tank for example, needs 50 to 60 tons of high-quality steel, while a fighter jet requires 10 tons of aluminum.

“The steel industry has always been a core engine for European prosperity,” said Ursula von der Leyen, president of the commission. “That means we have to help our steelmakers who are facing strong headwinds on the global market.”

The problems facing Europe’s production of key metals worsened after Trump imposed 25% tariffs on steel and aluminum earlier this month. In its action plan, the commission said that those measures would not only directly harm European exports to the US, but also mean that shipments previously destined for America would likely come to the EU instead.

Even before those tariffs, Europe’s steel and aluminum industries were struggling to compete in the global market due to high energy prices and Chinese overcapacity. While domestic steel production could meet the bulk of the EU’s needs, production of other metals like aluminum and nickel fall well short.

The action plan also comes as the EU attempts to reach its net-zero climate objectives by the middle of the century without losing its key industries on the way. The commission announced that by the fourth quarter it proposes extending its Carbon Border Adjustment Mechanism — designed to stop industries from moving elsewhere — to downstream products.