LONDON — German government figures and steel companies have said they are looking for a quick resolution to the impending United States import tariffs on European steel.
“We have agreed that very intensive talks between the [European Union and the US] are needed this week to avoid a trade conflict that could damage the vital interests of both sides,” Peter Altmaier, Germany’s economy minister, said on Monday March 19.
Under tariffs signed into law by US President Donald Trump earlier this month, European steel exports to the US will face duties of 25% from March 23.
The US imported 1.49 million tonnes of steel from Germany in 2017, according to US Commerce Department statistics.
In retaliation, the EU is considering imposing measures on US exports of steel and aluminum along with popular US exports to Europe such as bourbon, according to a draft list released by the European Commission (EC).
But Bernd Althusmann, economy minister of Germany’s Lower Saxony region, called for cooler heads to prevail in discussions between the EU and the US.
"The US is an important trading partner for us and should remain so in the future. Instead of pondering about tariffs and counter-duties, I urge all concerned to make the heated discussion more rational,” Althusmann said in a meeting with industry figures on March 16 in Hannover, Germany.
“Trade disputes only make losers, because punitive tariffs [will] harm the economies on both sides of the Atlantic," he added.
The Lower Saxony region has around 10,000 workers and its steel output makes up about 17% of German production, according to Volker Muller of employer's association Niedersachsen eV.
Effect on steel markets
Steel company representatives at the Hanover meeting also emphasized the harmful effects that tariffs could have on their businesses.
“It must be assumed that steel from other countries that hit the US customs wall will primarily seek its way into the European market,” said Frank Koch, chief executive officer of German steelmaker Georgsmarienhütte.
"The US is giving its steel industry an unfair competitive advantage through this protectionist intervention. Here, the European Union is called upon to effectively protect its steel industry,” Koch said.
This “threatens a resurgence of the import crisis, which peaked in 2015 and was mainly caused by massive overcapacity in countries such as China,” he added.
European flat steel markets could be flooded by material from countries such as Turkey when the Section 232 tariff is applied, sources told Metal Bulletin.
Metal Bulletin’s weekly price assessment for hot-rolled coil imported into northern Europe was unchanged over the week at €560-570 ($689-701) per tonne cfr main ports on March 14, with few import offers thanks to high-priced international markets and the imposition of anti-dumping duties for material from certain origins.
“The indirect consequences of customs duties are already incalculable, and in a recent survey of our member companies, we have already been able to gauge a marked deterioration in the mood of export expectations by simply announcing punitive tariffs,” Christian Budde of industry group NiedersachsenMetall said.
Despite the concerted attempt by German ministers to cool tensions in their dialogue with the US government, German representatives have also underlined their view that the EU should, if necessary, strike back against the tariffs.
"The European Union should rigorously tackle US action with the tools provided by the World Trade Organization. Safeguards are the only means of limiting the threat of trade diversion to the European market,” said Hans Jürgen Kerkhoff, president of German steel federation WV Stahl.