Why is Germany struggling to respond to these changes?
Germany seems particularly reluctant to acknowledge the painful disruption of the previous international order. But the 130-year success story of export-driven German economic growth is over for now. Trade partners are becoming unpredictable actors or even adversaries; free trade is being replaced by tariff regimes and hard-nosed interest politics. Economies like China and India, which we industrialized with German technology over decades, have become competitors – and in China’s case, systemic rivals. Amid this storm, German and European politics give the impression that it’s enough to throw on a light summer jacket and wait for better weather, while others are already forging ahead in robust gear. This naïveté costs jobs, value creation, and prosperity. Clinging to the old world is especially dangerous as many non-European countries have already begun implementing strategies to secure their domestic value creation.
What needs to happen now? Is it about trade protection against cheap imports and overcapacity?
There are three urgent areas for action:
- Effective trade protection
- Robust CO2 border adjustment (CBAM). Until then, continuation of free allocations under the European Emissions Trading System.
- Binding “European Content” quotas
The most pressing need is for effective trade protection against the nearly unrestricted influx of overcapacity into the European market. Globally, there are soon to be around 700 million tons of overcapacity – six times the EU’s total steel demand. A large portion comes directly or indirectly from China and is heavily subsidized – up to ten times more than the OECD average. We stand no chance against dumping on this scale.
Additionally, the tariff deal between the US and the EU is a disaster from the steel industry’s perspective: the 50% import tariff into the US is fixed, and other countries like Canada are following suit. The EU has yet to respond. This redirects even more global overcapacity to Europe while making exports increasingly impossible. Doing nothing in the face of overcapacity and imports would have catastrophic consequences for Europe’s steel industry – and for many other partners along our highly specialized and decades-old value chains.
What are the concrete consequences for thyssenkrupp Steel?
I’m losing key contracts to non-European competitors who can offer prices up to 50% below our production costs. One particularly affected product is electrical steel, crucial for energy supply and e-mobility – thus strategic sovereignty. We’re one of the last European producers of these highly complex specialty steels. No one should want dependency on Asian manufacturers.
The situation becomes grotesque when you consider that the EU still allows large-scale steel imports from Russia while our own industry is dying. In 2024 alone, nine million tons of domestic production were shut down in the EU. We’re cutting jobs while financing Russia’s war economy through slab purchases? I can’t imagine how to explain that to my employees.
There’s a proposal in Brussels for stronger trade protection. What does it entail?
It proposes halving duty-free import quotas and imposing a 50% tariff on imports beyond that. Swift implementation would send a clear signal. Eleven countries support it – Germany, Europe’s top steel producer, does not. If the German government’s hesitation is due to fears of cost increases from tariffs, it’s worth noting: according to a recent study, the additional costs for end products would be modest – about €1 for a washing machine and €50 for a car. That’s more bearable than the collapse of entire value chains. The steel industry expects the German government to make a fair decision and support measures that other European countries already deem necessary.
You mentioned two other urgent issues besides trade protection.
Yes. Second, we urgently need a robust CO2 border adjustment (CBAM). It’s unacceptable that we invest billions in green transformation while CO2-intensive steel continues to distort competition in Europe. CBAM must be fully implemented and extended to processed steel products – without exceptions or loopholes. Current rules invite circumvention: steel is shipped to Serbia, processed there, and enters the EU without barriers. This affects not just the steel industry but the entire value chain. Until CBAM reform is implemented, free allocations under the EU Emissions Trading System (ETS) must continue – especially for companies investing in decarbonization. Otherwise, those investing in climate-friendly technologies would be penalized. A market for green steel cannot emerge under these conditions.
And the third issue?
On the procurement side, we need binding “European Content” quotas. It would be absurd if Germany’s special infrastructure fund became a stimulus program for heavily subsidized Chinese steel. If procurement law isn’t changed accordingly, that’s exactly what will happen. We must promote domestic value creation to a reasonable extent – other countries already do.
What structural changes are needed to prevent a collapse of Europe’s steel industry?
We need long-term structural changes in Germany. As mentioned earlier, export-based growth won’t return. To preserve prosperity and social stability, we must make Germany attractive again for investment and foreign capital. The federal government has made proposals that must be implemented now—not later. These include better depreciation options and corporate tax reform. Additionally, the seemingly unstoppable trend toward overregulation must be curbed. According to the Ifo Institute, this costs Germany €146 billion in economic output annually.
What political and societal risks do you see if necessary changes are delayed further?
Much of what I’ve described may raise doubts about Germany’s viability and the ability of our politics – both here and in Europe – to act decisively, strategically, and beyond legislative terms. Indeed, clinging to old mindsets and watching as thousands of industrial jobs disappear each month would erode trust and fuel extremism and populism. That must not happen.
What is thyssenkrupp Steel’s responsibility in the current situation?
We stand by Germany as a steel location and are committed to transforming our industry. Steel must remain part of Germany’s and Europe’s industrial DNA. That’s why we’ve invested over €1 billion in our German sites in recent years. We’re also taking the lead in the green steel transformation – with substantial support from federal and state governments – by building our direct reduction plant in Duisburg. At the same time, we’re doing our homework on efficiency and costs and positioning ourselves for the future with our industrial concept. Unfortunately, this includes a significant restructuring and job cuts. But it’s about preserving entire highly specialized value chains – with steel as the starting point. To return to my earlier metaphor: instead of sheltering in a light summer jacket during the storm, we’re putting on our oilskins and taking action. Now we need clear political decisions that reach the market and industry – and have rapid impact.
