Merz Backs Bold EU Steel Tariff Plan to Protect Germany’s Steel Industry

Discover how German Chancellor Friedrich Merz endorses the EU’s new tough tariff measures aimed at shielding Germany’s steel sector from Chinese imports and energy crises. Learn about the industry’s challenges, EU policy responses, and what it means for jobs and the economy.

German Chancellor Friedrich Merz announced strong support for the European Union’s new steel tariff measures designed to safeguard Germany’s critical steel industry. This move comes amidst urgent crisis talks with steel executives and labor leaders, reflecting deep concerns over the industry’s future. The EU proposal includes raising tariffs to 50% on steel imports exceeding reduced duty-free quotas and calling for strict limits on steel imports from Russia as sanctions persist.

Industry Crisis Spurs Urgent Protective Measures

Germany’s steel sector faces a severe crisis: production levels are 10-15% lower than 2022 amid soaring energy costs and an influx of cheaper imports, particularly from China. Around one quarter of steel plants are temporarily closed, endangering roughly 80,000 direct jobs and millions in related sectors. ThyssenKrupp, Germany’s largest steelmaker, plans significant production cuts and 11,000 job losses by 2030, highlighting the industry’s precarious state.

EU Measures Target Unfair Competition From China

The European Commission’s plan drastically cuts tariff-free steel import quotas by 47% to 18.3 million tons annually, and imposes 50% tariffs on imports exceeding these limits. China, contributing over a third of EU steel imports worth €12.5 billion, is the main focus of these restrictions. Germany’s backing of such robust protectionist measures represents a shift from its traditional free-trade stance, aligning closely with US tariffs on steel. Additionally, Germany plans energy subsidies to boost steelmakers’ competitiveness amid rising production costs.

Implications for Industry and Economy

While these tariffs aim to revive EU steel production and save jobs, some downstream industries, such as automotive, express concerns over potential cost increases. The EU market’s effort to balance protecting domestic steel while minimizing consumer price impacts is a complex challenge. Fast-track adoption and sustained political commitment to the EU Steel and Metals Action Plan are crucial for restoring competitiveness and fostering green investments in steel manufacturing