The European Commission has decided to delay the introduction of counter tariffs on US goods, likely to create more flexibility for negotiations with the US government. This move appears to be in response to significant protests from European companies. US President Donald Trump had previously threatened that if certain US products, such as American whiskey, faced punitive tariffs, European wine exports would be hit with a punitive tariff of 200%.
The European Commission had announced plans to reintroduce counter tariffs in response to changes in the US Section 232 tariffs on steel and aluminium. One of Trump’s primary reasons for adjusting these tariffs was the sharp increase in steel exports from Europe to the United States.
With more than 200 million tonnes of crude steel capacity annually, the European Union is seen as the region with the highest steel production overcapacity after China.
EU Steel Mills: Shifting Blame
The European Steel and Metals Action Plan has barely been unveiled before the EU steel mills begin their complaints. As usual, the domestic mills are quick to blame others rather than taking responsibility for their own issues.
Green Steel Dreams and Hydrogen Hopes
A prime example of this is thyssenkrupp’s recent statement by its CEO, who mentioned the company’s €3.3 billion direct reduction plant for sponge iron, mostly funded by taxpayer money. However, he suggested that the plant might not be economically viable due to the lack of sufficient and affordable green hydrogen.
Unsurprisingly, the European Union’s and Germany’s green hydrogen ambitions, which were touted as a solution for a sustainable steel industry, were already criticized by us as unrealistic and utopian back in 2021, soon after their announcement.
Thorsten Gerber, CEO of the Gerber Group, commented: “Instead of dismissing our warnings about this misguided approach, the people in Essen should have set their egos aside and used their brains. But instead, they opted for billions in attention-grabbing subsidies, rather than encouraging demand within the internal market through better use of EU and member state funds.”
