EU debates support for Europe's steel industry as U.S. tariffs loom

BRUSSELS (Reuters) - European Commission chief Ursula von der Leyen hosted steel sector executives on Tuesday for a debate on how to ensure the industry's future health as it faces high energy costs, decarbonisation and impending U.S. tariffs.

The debate, launched eight days before U.S. President Donald Trump is set to impose 25% tariffs on steel and aluminium imports, will look into how to respond to what the bloc sees as unfair trade practices and global overcapacity, notably in China.

Among attendees were executives from the world's second largest steelmaker ArcelorMittal and ThyssenKrupp, leaders of global union federation IndustriALL, and representatives from key steel users in carmaking and construction.

One key question will be how to protect EU producers from a potential flood of steel imports diverted from the U.S. into the more open European market.

The EU has safeguards in the form of tariff-free quotas per quarter and per country for various categories of steel dating back to 2018, when Trump imposed metal import tariffs in his first term in office.

Under World Trade Organization rules, such safeguards can only be in place for a maximum of eight years, meaning they will run out during Trump's second term in mid-2026.

The European Commission, which oversees EU trade policy, has said it is looking into extending the safeguards or putting in place an alternative mechanism. It could also tighten the current system.

EU steel demand is likely to have fallen in 2024 for a second consecutive year.

The bloc's iron and steel imports totalled 39.5 billion euros ($41.5 billion) last year, while its exports of iron and steel to the U.S. were worth 5.4 billion euros, according to EU statistics office Eurostat.

The Commission also intends to gauge the industry's view on energy prices, including prospects for low-carbon hydrogen as a fuel, raw materials supply and how best to promote demand for low-carbon steel and secure investments.

($1 = 0.9512 euros)

(Reporting by Philip Blenkinsop and Tiffany Vermeylen; Editing by Jan Harvey)