Why US tariffs solely compound the EU metal trade’s existential woes

Good morning. A scoop to start out: Brussels plans a top-to-tail restructuring of the EU’s trillion euro frequent finances, in accordance to a leaked European Fee doc seen by the FT that proposes lumping 50 spending programmes into simply three streamlined funds — and extra money for shared defence investments.

Whilst you slept, Donald Trump introduced tariffs on all metal and aluminium imports. Right here, our commerce correspondent reviews from the sharp finish of the US president’s first measures to hit the EU, and we’ve got a dispatch from Warsaw on Poland’s appointment of an Elon Musk-esque official to slash pink tape.

Struggling

US tariffs are the very last thing the EU’s battered metal trade wants. “We are deindustrialising while we are speaking,” trade boss Axel Eggert tells Andy Bounds.

Context: Donald Trump final night time confirmed 25 per cent tariffs on all metal and aluminium imports. The levies will apply from March 4, reviving a paused commerce dispute with the EU from his first time period.

Eggert, director-general of Eurofer, mentioned the transfer would pile extra stress on Europe’s shrinking metal sector. Manufacturing fell to its lowest stage in 2023, slumping by 20 per cent in contrast with 2018 heights, earlier than Trump imposed metal tariffs for the primary time.

Some 3.7mn tonnes of metal offered to the US come from Europe, out of complete US metal imports of 18mn tonnes. Owing to the tariffs, not solely will a few of or not it’s shut out, however low cost steel from China, Indonesia and elsewhere may even attempt to discover a new market exterior the US — competing with pricier EU merchandise.

“The most open market is the EU, so we suffer twice,” Eggert mentioned. He estimates that Trump will most likely put tariffs on merchandise that use a whole lot of metal, reminiscent of automobiles, too.

In retaliation to Trump’s 2018 measures, Brussels erected a protect with tariffs of 25 per cent for imports of steel above a sure threshold, however it’s more and more rusty. The so-called safeguard measure has been weakened over time to permit extra steel in, and it has to finish in June 2026 beneath WTO guidelines.

Eggert urged the European Fee to tighten it once more earlier than Trump’s new tariffs hit, after which discover a technique to preserve safety.

In the meantime, different EU industries concern turning into collateral harm. In 2018 the EU additionally imposed tit-for-tat sanctions on bourbon whiskey, motorbikes and denims. That prompted Trump to hit EU spirits in return. EU exports to the US fell by 1 / 4, a drop of €131mn.

With China just lately placing tariffs on brandy, it’s a unhealthy time to be a distiller.

“We call on the EU and the US to work together to maintain tariff-free transatlantic spirits trade,” mentioned Spirits Europe boss Ulrich Adam.

Chart du jour: Unwanted effects

Ought to youngsters be given weight reduction medicine? A battle between these in favour and others who warn of the consequences on rising our bodies is brewing. Click on right here for the total interactive chart.

No strings connected

Poland’s Prime Minister Donald Tusk appears to have taken some inspiration from US President Donald Trump and chosen his very personal deregulation tsar, writes Raphael Minder.

Context: Trump has chosen Tesla proprietor Elon Musk as the pinnacle of a brand new unit tasked with “dismantling government bureaucracy”. This comes because the EU is additionally trying to reduce pink tape and simplify guidelines for companies to bolster its flagging industrial base.

Tusk introduced yesterday that Rafał Brzoska, one in all Poland’s most profitable entrepreneurs, would lead an advisory crew tasked with elaborating deregulation proposals.

Tusk confused that Warsaw’s purpose was to “create conditions that will make it possible for you [corporate leaders] to compete with entrepreneurs from other countries”, fairly than dismantling the general public sector, as Trump and Musk have got down to do in Washington.

Brzoska, who based the parcel locker firm InPost, has beforehand criticised Tusk’s authorities, and the premier has now urged him to place his cash the place his mouth is.

“You said that deregulation is not difficult, you just have to want it and that you know what needs to be done,” Tusk informed the entrepreneur throughout a press convention, including a Trumpian flourish: “So get on with it.”

Tusk can be creating a brand new financial council to deal with complaints from companies about extreme pink tape and the sluggish tempo of reforms for the reason that ruling coalition took workplace in December 2023.

The premier additionally mentioned that he would within the coming days welcome the bosses of Google and Microsoft in Warsaw to “finalise their investment plans”.

He had three phrases to summarise why 2025 could be “a breakthrough year” for Poland: “Investments, investments and once again — investments.”

What to look at at the moment

1. European Fee president Ursula von der Leyen meets US vice-president JD Vance in Paris.

2. European Fee presents its 2025 working programme.

3. Casual assembly of EU improvement ministers in Warsaw.

Now learn these