The Impact of US Steel and Aluminum Tariffs on European Markets
According to Dennis Grimm, head of Thyssenkrupp Steel, the European steel markets are facing increasing pressure following the announcement of US tariffs on aluminum and steel. Grimm stated in an interview on WDR 5’s "Morgenecho" that while the import tariffs would have a "minimal direct impact" on Thyssenkrupp Steel Europe, there would be a "redirection effect" that would affect the company and the entire European economic area.
Redirection Effect and Market Pressure
In the past year, the US imported 23 million tons of steel. Grimm believes that a significant portion of these quantities will now be diverted to the European economic area, putting further pressure on local markets. He emphasized that the steel industry in Europe and Germany is already facing challenging economic conditions.
Energy prices in Europe are two to three times higher than in China and the US. Additionally, there is overcapacity in the steel market. Thyssenkrupp Steel currently has a capacity of 11.5 million tons of steel but has only been producing around 9 million tons in recent years. The markets are already under pressure from imports from low-cost countries, and Thyssenkrupp Steel must improve its competitiveness.
Call for Government Action
Grimm called on the new German government to take swift action, highlighting the need for competitive energy costs and "reliable border protection" to prevent cheap steel imports. He stressed that "above all, we need predictability." Thyssenkrupp Steel remains "firmly committed to Germany as a business location" and aims to continue as the country’s largest steel producer.
Thyssenkrupp Steel’s Restructuring
Thyssenkrupp Steel, part of the industrial conglomerate Thyssenkrupp, is facing a major restructuring process. The company plans to significantly reduce its production capacity, resulting in the loss or outsourcing of 11,000 out of 27,000 jobs. Further details of the restructuring are yet to be finalized.
Conclusion
The US tariffs on steel and aluminum have created a ripple effect that is impacting the European steel markets. Thyssenkrupp Steel, as the largest steel producer in Germany, is concerned about the potential for increased competition and market pressure. The company has called for government support in addressing energy costs, border protection, and providing predictability to navigate the challenging economic landscape.
