As the Trump administration's decision to increase tariffs on imported steel and aluminum to 50 percent takes effect, a leading European expert has warned of negative consequences for both European steel producers and American downstream industries.
The United States raised tariffs on imported steel and aluminum from 25 percent to 50 percent starting from Wednesday, according to an executive order signed by U.S. President Donald Trump on Tuesday. He announced the decision last Friday during a visit to a U.S. Steel plant in West Mifflin, Pennsylvania.
The European Steel Association responded to the tariff hike, expressing concerns about a potential influx of steel into the European market.
The statement predicts that a substantial portion of the 27 million tons of steel originally destined for the U.S. will be redirected to Europe, as it did when the U.S. first imposed tariffs on steel in 2018. The association warns that without swift action, the European steel industry risks being overwhelmed.
It further notes that a large portion of the 3.8 million tons of steel exported from the EU to the U.S. is now effectively blocked due to the tariff.
Jacques Pelkmans, a senior researcher at the Center for European Policy Studies, has paid close attention to the U.S. trade policy. He argued that while the tariffs might offer temporary protection to the U.S. steel industry, they will ultimately backfire for country's economy, harming both American downstream businesses.
"Even if temporarily the tariffs might insulate the Americans from foreign competition in steel, they will still have an enormous negative repercussions because the steel is used in other sectors and not just cars, but in the building industry, in the shipbuilding industry, in the road industry. Steel is used everywhere and the cost of steel for these companies will hugely go up, so there will definitely be negative repercussions with the clients of the steel industry. [It will be] very costly for the U.S. but of course also for other countries. No, there's no winner here," he said.
U.S. tariff hikes on steel and aluminum to backfire on national economy: European expert
