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The writer is the main member of the Atlantic Council and advises the Disruptive Industries Technology Company.
European countries are increasing their defense expense at extraordinary speed; They have no choice. As Washington suggests that the United States can stop delivering weapons to their allies, European governments strive to manufacture as many as they can in the continent. But to manufacture arms and all kinds of other crucial goods, one needs a steel industry. If cheap steel continues to flood Europe and displacing national companies, we run the risk of disastrous dependence.
In March, the president of the United States, Donald Trump, imposed 25 percent tariffs on the EU steel, a repetition of the Trump First Administration Tariffs seven years ago. And that is not the only problem to face the creation of steel in the European continent. “We have never had so many challenges at the same time,” said Adolfo Aiello, a general deputy director of Eurofer, the European Association of the Steel Industry. “It begins with the global overcapacity of steel. Last year, it was 600 million tons worldwide. In Europe we produced 127mn tons of steel per year, so excessive capacity alone is four to five times larger.”
This steel is cheap because it is very bulky and because its production does not have to adjust to the strict rules of EU greenhouse gas emissions. In recent years, the EU has tried to control artificially cheap steel (which traditionally comes from China) by imposing anti -dumping tasks in Chinese manufacturing steel. But Chinese companies have responded by establishing production abroad. Today, non -European steel is increasingly manufactured in countries such as Türkiye, Indonesia, Algeria and Egypt, often by Chinese companies, which receive Beijing subsidies. The Hebei Xinfeng Steel Chinese steel manufacturer, for example, plans to build a plant of $ 1.65 billion in Egypt and export 70 percent of the steel produced there.
The flood of the European market with that steel has already caused painful employment losses: between 2008 and 2023, the EU lost a quarter of its steel production work. For EU steel manufacturers, there are more bad news. The 25 percent rate of the Trump administration especially foreign manufacturing steel means that steel will probably come to Europe. Global overcapacity of OECD projects will continue to increase even more, “putting huge pressures on the viability of even highly competitive steel manufacturers,” the organization said in April.
But that is globalization, critics will argue, and the most competitive product wins. And if buyers are fine with dirty steel, perhaps clean steel was an idealistic objective in the first place.
Steel is not any merchandise. It is used in everything, from cutlery to cars and bridges, and in defense equipment. The versatile alloy is a critical component in rifles, armored vehicle tanks, combat planes and naval ships. Only a small number of companies worldwide, including some in Europe, make the quality steel required in military equipment, but due to flooded markets, European companies that manufacture such high -flight steel are in a precarious position.
Of course, there is a good steel from the Chinese sphere, the type that would qualify for use in the Bundeswehr or the Swedish Navy. European defense companies could also sell products that comprise this steel. But doing so would even more undermine the steel industry already besieged in Europe. Companies, including those that manufacture high quality steel, would break, and more jobs would be lost.
And then, once we have become dependent on the steel of other countries, they could simply stop selling that steel, as well as Europeans care that the United States can activate a “F-35 killing switch or suspend software updates. Cutting steel supplies would be the best murder switch. “Safe supply chains and industrial independence are becoming increasingly important,” said Robert Limmer follow, head of the Swedish Security and Defense Industry Association. Being for an uncertain future means having steel at our disposal.
