Top Spain Stainless Steel Maker Wants EU to Be More Like Trump on Trade

Mint

8 hours ago

Europe's approach to trade will need to be more like Donald Trump's to protect an ailing steel industry from a flood of Chinese imports, according to the head of one of the region's top stainless steel makers.
Only outright tariffs can counter the wave of cheap Asian supplies that a safeguard system under the World Trade Organization's free-trade rules has failed to contain, said Bernardo Velazquez, chief executive officer of Spain's Acerinox SA.
'If we don't want to rely solely on imports and have our own supply of strategic raw materials, we need to consider imposing tariffs,' Velazquez said in an interview in Madrid. 'I'm not saying tariffs should be our 'favorite word' as Trump said, but we should stop having forbidden words in Europe.'
European steelmakers have been grappling in recent years with high energy costs and competition from Asian peers saddled with overcapacity. The trade wars triggered by the US president will likely only make things worse — not only due to less access to the American market but also because the EU will be targeted by Asian mills even more.
'They will target the world's largest free market, which is Europe,' said Velazquez.
The EU's safeguard system sets country quotas for duty-free imports and imposes a 25% levy on shipments above that. Chinese mills have partly skirted the system by selling their steel to Europe through third countries.
In the case of stainless steel, Indonesia is also a major producer that's been overwhelming the European market, Velazquez said. Other top producers of the material in Asia include India and Japan.
The safeguard, first implemented in 2018, is due to expire in 2026 and can no longer be renewed, but could be replaced by another instrument.
If nothing changes, European production 'will remain in Europe, as there will be no other market to sell to' and Asian manufacturers will also look to the region's market as they, too, will no longer be able to sell to the US, said Velazquez.
On the bright side, Velazquez sees Germany's recently approved spending package as a potential driver for the industry, a view shared with other players who have called for tariffs to ensure they can back Europe's renewed defense and infrastructure push.
Acerinox has a diversified business, with most of its earnings before items coming from the US. Its North American Stainless Inc. unit makes about half of that kind of steel in the continent.
Still, the Madrid-based company's North American operations won't necessarily fully benefit from the tariffs imposed by Trump, said Velazquez.
They're 'a political matter' which is 'creating a lot of uncertainty even for American companies. We don't know whether the countries from which we buy our equipments or raw material will be subject to some kind of restrictions' and that has an impact on the business, he said.
This article was generated from an automated news agency feed without modifications to text.