Liverpool — Steel is and always has been an intensely political industry, in large part thanks to previous swathes of government ownership in parts of the world -- and current state-involvement in some.
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Donald Trump's eagerly anticipated announcement Thursday that the US would impose 25% tariffs on steel imports, without mentioning exclusions for trade partners or allies, put steel firmly front and center of political discourse and commentary.
"We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," Jean-Claude Juncker, president of the European Commission, said.
"The EU will react firmly and commensurately to defend our interests. The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation," he said.
EU Commissioner for Trade, Cecilia Malmstrom, said the measures would have a "negative impact on trans-Atlantic relations and on global markets," and that they would "raise costs and reduce choice for US consumers."
The EU would seek dispute settlement consultations with the US in Geneva at the "earliest opportunity," she added, suggesting the US acting alone would do nothing to address the issue of global overcapacity.
The US has lambasted efforts to address excess capacity, such as those provided by the G20 forum, which it says have been nothing more than a talking shop and accomplished no reduction in steelmaking capability.
"We welcome the announcement of the Commission that appropriate and swift measures will be taken to safeguard the interests and jobs in our industry," said Axel Eggert, director general of European steel producers' association Eurofer.
"The EU must not allow that the moderate recovery in our industry over the last year is now being destroyed by the EU's most important political ally."
Seth Rosenfeld, an analyst at investment bank Jefferies, said the European Commission would be "forced to implement safeguard measures," and that continental mills could also benefit from potentially securing access to the US, allowing them to sell into the "world's highest priced markets" -- which would not be available to others.
He also said the US mills would benefit, obviously.
"For an equity market already obsessed with inflation risks ... get ready for a doozy," he quipped -- he did suggest pressure from consumers and foreign suppliers would lead to a more nuanced policy, with a 25% tax across the board "viewed as a direct tax on US consumers."
The US is structurally short steel and has to import, so for grades that are not produced domestically, mills would likely increase prices to offset the duty, meaning buyers would "eat" it, rather than the sellers.
Europe exported 5 million mt of steel to the US last year.
Shares in European mills were down across the board at the time of writing.
ThysennKrupp lost 1.86% by 11:33 London time, while Tata Steel lost 4.29% -- Tata is exposed to the US via an autosheet business in Detroit -- and Salzgitter 2.81%.