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For an organization that began as the European Coal and Steel community in the early 1950s, it seems apt that the EU is flexing its trade muscles over steel.

EU commissioners sign off on a proposal today to slap 50% tariffs on steel imports into the bloc – twice the current rate. The move, first reported by Bloomberg last week, is an attempt to shore up the EU’s domestic steel industry and build a tariff wall against cheap imports mainly from Asia. The EU is also drastically reducing import quotas as part of the package. 

“It is a very restrictive clause that does not have precedent in Europe,” the EU’s industry commissioner, Stephane Sejourne, told Jorge Valero in an interview.
 

The EU currently slaps a 25% tariff on most steel imports once quotas are exhausted. But that mechanism expires next year, prompting the EU to develop more permanent protections. A draft proposal seen by Bloomberg shows that the total quota across all steel categories will be cut to 18.35 million tons – a whopping 43.7% reduction on average compared to 2024 levels through July.

Shares of European steelmakers like ArcelorMittal SA and Voestalpine AG jumped on the news last week. 

The background to the decision is Chinese over-capacity in the steel sector, long a gripe for other markets. 

Brussels is hoping to find common ground with President Donald Trump’s administration on the issue. Steel and aluminum were not part of the trade deal struck between European Commission chief Ursula von der Leyen and Trump in Scotland in July — and the EU continues to face a 50% tariff on steel exports to the US.  Now the EU is trying to convince Trump to lower that rate for EU steel and jointly target China instead.

“We hope we can have talks as quickly as possible that will get a result,” Sejourne told Bloomberg, referring to discussions with Washington. “But we share the same industrial agenda as the US — we want more local production, more economic growth and protection for our industry.”

While trade relations with the US are looming over today’s decision, other steel exporters are looking on in alarm, not least the UK, which is a big exporter of the metal to the bloc.

The Latest

• President Emmanuel Macron gave his outgoing prime minister, Sebastien Lecornu, until Wednesday night to negotiate with France’s political parties in a last-ditch effort to prevent the country from falling deeper into crisis. 
• The EU has proposed restrictions on three firms that have provided fake flags to sanctioned oil tankers in Russia’s shadow fleet, according to documents seen by Bloomberg.
• Christine Lagarde suggested the ECB has circled in on its inflation target and expects the economy to pick up in 2026. 
• The Irish government is to deliver its toughest budget in years in a bid to shield its economy from the threat of declining investment from US firms.
•  The EU has proposed imposing sanctions on A7A5, a ruble-backed stablecoin tied to sanctioned Russian actors, according to documents we have seen.
• Orsted raised 60 billion Danish kroner ($9.4 billion) through a  rights offering that’s critical for the company to tackle the downturn facing the wind-power industry.

Seen and Heard on Bloomberg

French MEP Stephanie Yon-Courtin from the Renew group in the European Parliament told Bloomberg Radio's Stephen Carroll that fresh elections are not the answer to the political stalemate in France.  “If you don't change the method, then changing heads, changing people, will not solve anything,” she said in an interview in Paris this morning. 

Chart of the Day

German factory orders unexpectedly fell for a fourth month, another setback to the government as it struggles to lift Europe’s biggest economy out of two years of contraction. Demand declined 0.8% in August, with large orders preventing an even sharper drop. Economists polled by Bloomberg had predicted a 1.2% gain, with just one analyst anticipating a decrease. 

Coming up

• Irish Finance Minister Paschal Donohoe holds a press conference on Ireland’s budget this evening 
• ECB’s Christine Lagarde speaks at a Business France event in Paris this evening
• Greenland’s prime minister, Jens-Fredrik Nielsen, addresses European Parliament in Strasbourg tomorrow 
• EU Agriculture Commissioner Christophe Hansen meets Romanian Prime Minister Ilie Bolojan in Bucharest

Final Thought

The forint sank today after Hungarian Prime Minister Viktor Orban’s government raised pressure on the central bank to cut interest rates and help kickstart an ailing economy. While the five-term premier had promised voters a “flying start” to economic growth this year, Hungary’s economy contracted in the first quarter of the year and posted a modest expansion in the second.

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