DUESSELDORF/FRANKFURT (Reuters) -Salzgitter, Germany's second-biggest steelmaker, on Monday warned that Washington's tariff policy was dealing a severe blow to European industry, after the U.S.
Salzgitter CEO Warns of Severe Impact from U.S. Tariffs on European Steel
By Tom Käckenhoff and Christoph Steitz
DUESSELDORF/FRANKFURT (Reuters) -Salzgitter, Germany's second-biggest steelmaker, warned on Monday that Washington's tariff policy was dealing a severe blow to European industry, after the U.S. administration unveiled plans to double steel import levies to 50%.
According to Germany's steel association, the United States accounted for around a fifth, or 4 million metric tons, of European steel exports outside of the EU, making it the sector's most important export market.
"The erratic tariff policy of the USA is hitting Europe's economy hard - especially Germany," Salzgitter CEO Gunnar Groebler said in a statement.
Groebler said apart from the direct tariffs on exports to the U.S., there was also increased import pressure on the EU market as a result of rising volumes of cheaper Asian steel in Europe.
Asian steel has been flooding the European market for years and the fear of that trend intensifying due to the U.S. tariffs has been the biggest headache for Europe's sector, in addition to high energy prices.
In response to those fears, the EU on April 1 tightened steel import quotas to reduce inflows by a further 15% as part of its European Steel and Metals Action Plan.
Shares in ArcelorMittal and Thyssenkrupp, Europe's two biggest steelmakers, were down 0.2% and 1.2%, respectively, while Salzgitter was flat.
Shares in Spain's Acerinox, which produces more steel in the U.S. than in Europe, were up 4.2%. A source close to the company said that overcapacity was going to reach Europe and that the EU had to take measures to protect the local industry against subsidised Asian rivals.
Just 4.5% of Salzgitter's sales come from its U.S. business, with its non-steel technology division accounting for half of that. Thyssenkrupp has previously said that the United States accounts for less than 5% of its steel exports.
Thyssenkrupp did not respond to a request for comment.
"An increase in steel import duties in the USA to 50% should prompt the EU Commission to accelerate its efforts to implement the measures under the Steel and Metals Action Plan," Groebler said.
(Reporting by Tom Kaeckenhoff and Christoph Steitz; Additional reporting by Lavi West Larranaga; Editing by Friederike Heine, Bernadette Baum and Rod Nickel)
