As the U.S. tariff hike on steel and aluminum takes effect, European producers voice concerns over rising costs and industry impact.

BRUSSELS, June 6 (Xinhua) -- The U.S. government's decision to raise tariffs on steel and aluminum imports to 50 percent took effect Wednesday, escalating a trade dispute that threatens to further weaken the EU's metals sector and disrupt downstream manufacturing across the bloc.

European producers have warned that the steep new duties will inflict serious damage, compounding existing pressures and driving up costs for manufacturers dependent on competitively priced raw materials.

The latest levies, applied broadly to nearly all U.S.-imported steel and aluminum, followed a 25 percent tariff introduced in March. While that initial measure had limited overall impact on EU exports to the United States, analysts say doubling the rate will effectively price many European producers out of the American market.

"Most of the 3.8 million tonnes of EU steel exports to the United States are now under a de facto import ban: at a 50 percent blanket tariff," said Axel Eggert, director general of the European Steel Association (EUROFER). "Even Europe's highest-quality, most competitive steel products will be priced out," Eggert said following the implementation of the new tariffs.

Earlier in March, EUROFER had criticized Trump's "America First" trade policy, warning it could become the "final nail in the coffin" for Europe's steel industry.

The association noted that the overall market situation for European steel is much worse than in 2018, as the new measures remove all product exemptions and tariff rate quotas that the EU had previously negotiated.

With EU steel exports to the United States already having fallen by 1 million tonnes, the bloc stands to lose at least another 1 million tonnes. Moreover, the tariff now covers "derivative" steel products, potentially reducing export opportunities for a further 1 million tonnes, EUROFER said.

Germany, the EU's largest steel producer, is already contending with surging energy costs and delays in transitioning to low-carbon "green steel" technologies. Industry giants such as Thyssenkrupp and Salzgitter have unveiled major restructuring and cost-cutting plans. Thyssenkrupp plans to break up its business and cut around 11,000 jobs, while Salzgitter aims to reduce costs by 500 million euros (approximately 571.95 million U.S. dollars) by 2028, having already saved about 130 million euros (148.36 million dollars).

Gerhard Erdmann, managing director of the German Steel Employers' Association, told Bild newspaper that it remained unclear whether Washington would fully enforce the higher tariffs. However, he warned that if implemented, they would "further aggravate the already precarious state of Germany's steel industry."

He emphasized that the real threat lies not only in the loss of direct sales to the United States, but also in broader ripple effects, as key German industries -- such as automotive and machinery manufacturing -- depend heavily on steel and maintain strong export ties with the United States.

"If German car and machinery makers see sales decline due to tariffs, the consequences will hit our steel mills with full force," he said, warning of a painful and far-reaching industry restructuring.

European aluminum producers have voiced similar concerns. The industry association European Aluminium condemned the U.S. decision to double tariffs, warning that it would "further destabilize transatlantic trade relations and disrupt long-standing supply chains between two key economic partners."

In a statement, the association expressed deep concern that the move would "indirectly fuel scrap outflows from Europe and add further distortion to an already fragile trade environment."

Gavran Igor, an economic analyst from Bosnia and Herzegovina, said the tariff hikes reflect a protectionist mindset that violates international trade norms and undermines global economic stability. He told Xinhua the measures would "inevitably trigger retaliatory tariffs from other countries and ultimately harm the U.S. economy most in the long run," adding that such actions erode trust and treat global partners as subordinates rather than equals.

Igor called on major economies -- including China, the EU, Japan and India -- to take the lead in building a fair, rules-based global trading system.

Ljubo Jurcic, the former Croatian Minister of Economy, echoed the concern, noting that history shows tariff wars hurt the world economy and fuel uncertainty. He pointed out that while the Trump administration claimed high tariffs would protect domestic industry and reshore supply chains, experience from his first term showed they failed to boost the U.S. economy -- instead, they ended up hurting U.S. consumers.

European Commissioner for Trade and Economic Security Maros Sefcovic warned Wednesday that Washington's decision to raise tariffs on steel and aluminum "clearly doesn't help the ongoing negotiations" and risks undermining recent progress. He emphasized that the EU stands ready to defend its interests and will do its utmost to rebalance bilateral trade should negotiations collapse.