Eurofer: American Tariffs Threaten Recovery of the Steel Sector

The decisions of U.S. President Donald Trump to impose import tariffs pose a threat to the recovery of the European steel sector, stated the Eurofer association, while also raising the consumption growth forecast for 2018.

The level of visible steel consumption, which excludes the impact of inventory changes, is expected to increase by 2.3 percent in 2018, raising the earlier growth forecast of 1.9 percent, announced the European Steel Manufacturers Association.

The latest data shows that the European steel industry has finally returned to a firmer footing, said Eurofer’s Director General Axel Eggert, adding that the 25 percent U.S. tariffs on steel imports have called this into question.

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On March 23, Trump also imposed a 10 percent tariff on aluminum imports along with the steel tariffs, but allowed temporary exemptions for Canada, Mexico, Brazil, the European Union, Australia, and Argentina.

The decision on tariffs for Canada, the EU, and Mexico has been postponed until June 1. According to a well-informed source, there will be no further extensions of exemptions after that date, reported Reuters.

The EU announced tariffs on U.S. goods amounting to 2.8 billion euros, including peanut butter and jeans, if the export of metals from the EU to the U.S., worth 6.4 billion euros, is affected by tariffs. It has also launched an investigation into the possible introduction of protective measures that would limit EU steel imports, fearing that they could spike due to the redirection of steel exports previously aimed at the U.S.

Eurofer notes that preliminary data suggests that steel imports into the EU increased by eight percent in the first quarter, after falling by 1.8 percent last year due to trade protection measures that the EU implemented to combat dumping and unfair subsidies.

>>> Steel production increased due to the introduction of tariffs

Steel imports from India increased by 96 percent in the first quarter, and from Turkey by 64 percent, Eurofer reported, due to the cancellation of the decline in imports from China, Russia, Ukraine, and Brazil, whose steel is mainly affected by the EU’s anti-dumping tariffs.

As reported by Eurofer, visible steel consumption in the EU increased by 1.6 percent in the first quarter. For the next year, the association predicts a 1.4 percent growth in visible consumption, compared to 2.3 percent this year.