The European steel industry is facing a storm of challenges that threaten its very foundation, as highlighted by a cascade of warnings, trade disputes, and political standoffs unfolding across the continent. On August 8, 2025, Slovak steel producer US Steel Košice sounded the alarm, warning of a potential collapse of the EU steel sector due to cheap imports and sagging demand—a sentiment echoed by industry leaders and policymakers grappling with the consequences of global trade tensions and years of industrial policy decisions.
According to Euractiv, Michal Pinter, Director of Government and European Affairs at US Steel Košice, declared the situation "critical," stating, "The low prices and high import levels make production uneconomical. This is not sustainable. We are in a state of emergency. If we don’t act now, we risk losing a strategic sector permanently." The company is currently operating at just two-thirds of its capacity, a stark indicator of the sector’s distress. In 2024, US Steel Košice slashed steel production by 12.8% compared to the previous year, down to 3.83 million net tons, while steel product shipments fell 8.2% to 3.58 million tonnes—the lowest levels since 2020, as reported by GMK Center.
These woes are not isolated. The European Commission’s safeguard measures on steel imports are set to expire on June 30, 2026, with new proposals expected in late 2025. The uncertainty has prompted calls for robust action. Pinter has urged the EU to introduce a more flexible and responsive system of safeguards, including restrictions on imports to historical levels and duties as high as 50% above quotas, mirroring recent US decisions. Without stronger protection, the European Steel Association (EUROFER) warns that EU steel production could plummet from 160 million tons in 2018 to just 10 million tons by 2050—barely 5-10% of the continent’s needs.
The backdrop to these anxieties is a rapidly shifting global trade environment, heavily influenced by US policy. On August 7-8, 2025, the United States imposed new tariffs on steel and aluminum imports, including a 15% tariff on EU goods. This move is part of a broader campaign by former President Donald Trump, who has ramped up duties on imports from India, Canada, Brazil, South Korea, and Mexico, while threatening a 100% tariff on chips and semiconductors—with possible exceptions for US-based companies. As Bloomberg reports, Trump has warned that if courts curtail his tariff authority, "It would be 1929 all over again, a GREAT DEPRESSION."
The US’s aggressive stance has sent ripples through global markets. The imposition of tariffs on 1kg and 100oz gold bars, for example, has disrupted trade from Switzerland and other refining centers, catching the industry off-guard. Meanwhile, the US and China face an August 12, 2025 deadline to extend their tariff pause, with both sides bracing for further escalation. The US and EU are still hashing out the final terms of a trade deal that includes these new tariffs, leaving European producers in a state of limbo.
For Europe’s steelmakers, the timing could hardly be worse. Years of declining demand, competition from lower-cost producers, and policy uncertainty have left the industry vulnerable. According to GMK Center, EU steel production has already dropped from 160 million tons in 2018 to 130 million tons in 2024. Without effective safeguards, EUROFER’s projection of a collapse to 10 million tons by 2050 looms as a real possibility.
But the crisis is not just about numbers or tariffs—it’s also about sovereignty, national security, and the politics of industrial ownership. Nowhere is this more evident than in the United Kingdom, where British Steel’s Chinese owner, Jingye Group, is demanding hundreds of millions of pounds from the UK government to sell the company back, despite the plant losing nearly £700,000 per day. As The Spectator notes, British Steel was privatized in the 1980s and sold to foreign owners, a decision that has come back to haunt policymakers as they face what some describe as "industrial blackmail."
Jingye acquired British Steel in 2020, pledging to save 3,200 jobs and investing heavily in the process. Yet, with mounting losses and rising political pressure, the company is now seeking a payout closer to £1 billion—far above the £500 million reportedly offered by the UK government. Taxpayers are already footing the bill for daily losses through a £2.5 billion steel support fund. The government, led by Labour, is caught between the optics of handing public money to a Chinese firm, the risks of nationalizing a loss-making asset, and the imperative to preserve the last blast furnaces in Scunthorpe and the jobs they support.
The standoff has sparked a broader debate about the wisdom of selling strategic assets to foreign powers. The article in The Spectator argues that the UK’s predicament is the result of decades of "short-term thinking"—not just in steel, but across critical sectors like energy, water, transport, and telecommunications, many of which are now owned or controlled by foreign investors. The risk, as the article puts it, is that "when you sell your strategic assets, you sell your sovereignty. When you try to buy them back, don’t be surprised if the price is blackmail."
For now, the UK government is desperately seeking another private buyer for British Steel, hoping to avoid both the political fallout of nationalization and the loss of sovereign steel production. But with no easy solutions on the horizon, some argue that public ownership may be the only logical step. As the article notes, "nationalising British Steel may be the only logical step: the government already pays the bills. No private buyer will come forward while Jingye holds it hostage. Without it, we lose sovereign steel production forever."
Amid these high-stakes negotiations, there are calls for a fundamental rethink of Europe’s approach to industrial policy. Industry experts and commentators urge governments to invest in modern, green steel production technologies—such as electrification, carbon capture, and hydrogen-based steelmaking—and to secure domestic supply chains for critical materials. The war in Ukraine and pandemic-era supply shocks have underscored the dangers of over-reliance on global supply chains for strategic goods.
At the heart of the debate is a clash of values and priorities. Some policymakers and industry leaders see robust public intervention and strategic investment as essential to preserving jobs, national security, and economic resilience. Others warn of the risks of inefficiency, investor flight, and a return to the bureaucratic excesses of the past. The UK’s Labour government, for example, is wary of being seen as reverting to "old Labour" instincts, even as the practical case for nationalization grows stronger.
As Europe’s steel industry stands at a crossroads, the choices made in the coming months will have far-reaching consequences—not just for jobs and communities, but for the continent’s ability to shape its own economic destiny in an era of intensifying global competition. Whether through new trade defenses, strategic investments, or a reassertion of public ownership, the stakes could hardly be higher for one of Europe’s most vital—and embattled—industries.
For now, the fate of Europe’s steelmakers hangs in the balance, caught between the forces of global trade, political calculation, and the enduring importance of strategic industry.
