New U.S. tariffs deepen EU steel crisis as recession extends into 2025
The European steel industry faces a deepening crisis as the full impact of the new 50% U.S. tariffs on steel hits the market. Already weakened by persistent economic stagnation and global overcapacity, the sector is now bracing for a fourth consecutive year of recession in apparent steel consumption, with recovery not expected before 2026—if at all.
According to EUROFER’s latest Economic and Steel Market Outlook (Q2 2025), apparent steel consumption in the EU will fall by another 0.9% in 2025, following a 1.1% decline in 2024. This downturn reverses earlier expectations of moderate growth and reflects continued weakness in steel-using sectors such as automotive and construction. The Steel Weighted Industrial Production index (SWIP) is now forecast to shrink by 0.5% in 2025 instead of rebounding by 0.9%.
U.S. tariffs trigger market disruption
"With the doubling of U.S. blanket tariffs on steel to 50% without exceptions, we expect massive deflection of the 27 million tonnes of steel previously destined for the U.S. towards the European market,” said Axel Eggert, Director General of the European Steel Association (EUROFER).
As import penetration was already at 27% in 2024—historically high levels, EU producers face further losses in market share, leading to production cuts, layoffs, and stalled decarbonisation projects.
With such tariffs, “even Europe’s highest-quality, most competitive steel products will be priced out,” commented Eggert.
“Without swift and effective EU trade measures, we risk irreversible damage. We call on the European Commission to act before it’s too late.“
Steel consumption remains below pre-pandemic levels
Steel demand remained volatile throughout 2024, reaching 30.1 million tonnes, with a modest 0.5% uptick in Q4 failing to offset a full-year contraction. Domestic deliveries fell by 2.8%, while imports surged by 6.3%. The combined effect of external competition, geopolitical instability, and high energy prices has eroded any chance of short-term recovery.
Steel-using industries also struggled. Automotive output dropped by 2.6%, and construction stagnated. The overall contraction in steel-using sectors reached 3.7% in 2024 and is expected to continue in 2025, with only a mild rebound of 1.3% forecasted for 2026.
What’s next for the EU steel industry?
EUROFER has issued an urgent call for the European Commission to implement the “highly effective trade measure” promised in its Steel and Metals Action Plan. This safeguard is seen as critical to counteract the trade deflection effects of U.S. tariffs and restore stability to the EU steel market. At the same time, industry leaders stress the need to revive stalled EU-U.S. trade negotiations.
The next few months will be crucial in determining whether Europe can preserve its industrial backbone—as policymakers and industry leaders weigh critical decisions amid ongoing trade challenges and structural shifts.
Some backstory:
When the tariffs started
Initial U.S. steel tariffs were raised to 25% effective March 12, 2025, under Section 232 of the Trade Expansion Act.
A further increase to 50% was announced May 30 and took effect on June 4, 2025, under a new executive order bypassing previous exemptions.
Will U.S. courts or EU talks decide the future of steel tariffs?
A U.S. federal court invalidated the tariffs on May 28, but that decision was stayed on appeal—the case is currently before the Federal Circuit, with briefs due by June 9, and a potential ruling soon after.
The EU and U.S. are also engaged in intensive negotiations, aiming to reach a resolution by early July to prevent further escalation. If talks break down, both sides are prepared to impose retaliatory trade measures.
Update June 13: On June 10, 2025, the US Court of Appeals for the Federal Circuit allowed tariffs introduced earlier this year by President Trump to remain in effect while legal challenges proceed. The court has set an expedited schedule, with oral arguments scheduled for July 31, 2025, and a final ruling expected no earlier than August. Among these measures, 50% tariffs on steel and aluminium—announced on June 3 and enforced since June 4—remain fully in place. Meanwhile, the European Union has begun preparing countermeasures in case trade talks fail, with possible actions anticipated as early as July 14, 2025.
Picture by © European Parliament / Pietro Naj-Oleari
