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The global steel industry is facing two emergencies: on the one hand, the adoption of protectionist policies in the United States, culminating in the tariffs on steel and aluminium imposed by the Trump administration; on the other, the growing wave of low-cost exports from Asia, particularly China, where the sector benefits from significant state subsidies and structural excess production capacity. According to estimates from the Organisation for Economic Co-operation and Development, global overcapacity exceeded 600 million tonnes in 2023 and could exceed 720 million by 2025. This means that steel mills around the world are producing far more than the market can absorb, generating downward competition that especially penalizes European producers, already burdened by higher energy costs and stringent environmental regulations. The result is a progressive weakening of the continent’s industrial fabric: numerous plants have reduced operations or suspended production, while approximately 18,000 jobs were lost in 2024 alone. Europe thus faces a crucial challenge: deciding whether to defend its production capacity or accept a marginal role in the new global balance.
THE EUROPEAN RESPONSE
The European Commission announced in March 2025 its intention to present an action plan for the steel sector, in direct response to the US tariffs. The objective was twofold: to counter measures deemed unfair by trading partners and to review the import limits introduced during the steel dispute that began in 2018. These limits, still in force, are due to expire in June 2026, but Brussels’ intention is to bring forward the deadline to ensure continued protection of the internal market. On October 7, 2025, the Commission formalized its proposal, outlining a package of measures of historic significance. The plan calls for halving the amount of steel that can be imported into the Union duty-free, from 30.5 to 18.3 million tonnes annually. Imports above this threshold will be subject to a 50% tariff, double the current level of 25%. The initiative, described by President Ursula von der Leyen as necessary and urgent, aims to restore a competitive balance between European producers and non-European competitors. The Commission has also introduced the so-called melt-and-pour rule, which requires importers to declare where the steel was actually produced. This measure stems from the need to prevent duty evasion through relabelling the origin of products, a practice particularly widespread in China, which often exports steel via intermediary countries.
OVERCAPACITY AND ASIAN COMPETITION
The main vulnerability for the European steel industry is the expansion of Asian supply. China, which produces more than half the world’s steel, has continued to support its industry through public subsidies, fueling a dumping dynamic that translates into artificially low prices. The domino effect is clear: Turkey, India, Vietnam and South Korea—often partners or intermediaries in the Chinese export chain—are now among the main steel suppliers to the European Union. For European producers this scenario has become unsustainable. The continent’s steel mills are currently operating at 67% of their capacity. With the new measures, Brussels aims to restore capacity utilization to 80%, ensuring greater employment and industrial stability. The phenomenon of overcapacity is not only economic, but also geopolitical. The availability of large quantities of low-cost steel allows China to exert strategic influence on global markets, while Europe risks losing not only competitiveness but also autonomy in key sectors such as automotive, infrastructure and defence. Hence the growing awareness that the steel issue cannot be treated simply as a trade issue, but as an element of economic and industrial security.
THE TRANSATLANTIC DIMENSION: BETWEEN COMPETITION AND COOPERATION
The new European measures come against a backdrop of renewed confrontation with the United States. Despite tensions arising from US tariffs on European steel and aluminium (50% and still in effect), Brussels and Washington share a common goal: to limit the impact of global overcapacity and combat dumping practices, especially those originating from China. The European Union, therefore, intends to maintain a constructive dialogue with the United States to develop coordinated industrial defence strategies. However, the decision to also apply the new quotas to imports from the American market reflects Europe’s desire to adopt a balanced and independent approach, based on equal rules for all. This is a significant difference from US policy, which is more selective and openly protectionist. In this context, the European position defines itself as a form of “legitimate protection,” compatible with the rules of the World Trade Organization. Brussels does not intend to start a trade war, but rather to reaffirm the principle of reciprocity and fair competition. The goal is to protect European industry without compromising market openness, keeping approximately 10 percent of the steel sector open to international competition.
INDUSTRIAL SOVEREIGNTY AND EUROPEAN REINDUSTRIALIZATION
The Commission’s strategy represents a paradigm shift in European industrial policy. For the first time, the Union explicitly affirms the principle of industrial sovereignty: the need to preserve local production capacity as a prerequisite for economic autonomy and strategic security. The Commissioner for Industrial Policy, Stéphane Séjourné, summarized the objective of the new plan with a clear formula: “reindustrialize Europe.” The concept goes beyond the mere defence of the steel sector; it is an attempt to restore the centrality of the manufacturing sector in an era of ecological transition and global competition. The debate within the Commission was intense. Some commissioners advocated reducing mass production by focusing exclusively on “green” or very high-quality steel, compatible with the climate objectives of the Green Deal. Others, however, defended the idea of maintaining a diversified industry capable of producing steel for defence, infrastructure and automotive. The second line prevailed, linking the protection of steel to a long-term vision of European economic sovereignty.
ECONOMIC AND SOCIAL IMPLICATIONS
The new package of measures was welcomed by the main industry organizations. Eurofer, the federation of European producers, called it “a necessary turning point,” while trade unions expressed cautious optimism, emphasizing the possibility of safeguarding thousands of jobs. From an economic perspective, the Commission expects a moderate impact on prices: an average increase of 3%, equivalent to about €50 more for a car and €1 more for a washing machine. Brussels considers this effect a sustainable sacrifice for the sake of protecting industrial safety and jobs. However, the success of the plan will also depend on the political support of member states. Germany, Europe’s leading automobile manufacturer and a major steel consumer, has not yet expressed a definitive position. His support will be crucial to the approval of the measure.
OUTLOOK AND STRATEGIC SIGNIFICANCE
The European Union intends to approve the new rules by June 30, 2026, when the current quota regime expires. Unlike previous measures, which were often temporary and limited, the new system is designed as a structural and permanent protection. This marks a shift from a defensive approach to a proactive industrial policy, aimed at rebuilding the continent’s manufacturing base. Looking ahead, the European steel strategy could become a model for other strategic sectors, such as batteries, semiconductors, and green technologies, where production autonomy is increasingly perceived as an essential element of sovereignty. The challenge concerns not only the economy, but Europe’s very identity as an industrial power. Defending steel means defending the ability to build infrastructure, vehicles and defence equipment: in other words, Europe’s ability to play a leading role in the new world order.
STEEL IS A SYMBOL OF SOVEREIGNTY
The 2025 European Steel Plan represents a key milestone in the Union’s economic policy. Faced with unfair Asian competition and US protectionism, Brussels has chosen to reaffirm its productive autonomy, laying the foundations for an industrial policy based on balance, resilience and sustainability. The decision to halve import quotas and raise tariffs to 50 percent is not just a technical measure, but a political act that redefines Europe’s relationship with globalization. In a world fragmented by economic and geopolitical tensions, steel is once again a symbol of sovereignty: a metal that, once again, marks the boundary between industrial dependence and independence.