US steel tariffs threaten German steel exports, spark EU retaliation

U.S. tariffs on imported steel products are imposing threats on German steel producers' exports to the American market, with the EU claiming retaliatory tariffs on 26 billion euros (about 28 billion U.S. dollars) worth of U.S. goods in response. 

The European Commission announced the potential countermeasures on Wednesday, in response to the expiration of prior exemptions and the reinstatement of 25 percent tariffs on all steel and aluminum imports by the U.S.

According to the European Union Industry Association, around 4 million tons of EU steel were exported to the U.S. in 2023, with a quarter of that originating from Germany. The Benteler electric steel mill in Lingen, northwest Germany, which produces raw pieces of steel from scrap metal, is among the companies feeling the impact.

"We produce approximately 650,000 tons of steel each year. That means we make over 2,000 tons each day," said Andreas Stadtherr, Lingen Plant Manager, Benteler Steel.

These steel billets are then transported by train to other Benteler facilities in Germany, where they are transformed into hot-rolled and cold-drawn tubes for various industries across Europe, including automotive, energy, and construction. Some products are even sent to the company's tube plant in Louisiana.

"Tariffs will of course affect the products that we supply from Europe, i.e., the steel that we supply from Lingen to the U.S.," said Thomas Michels, CEO of Benteler Steel.

Even before the tariffs were enacted, the German steel industry was grappling with rising energy costs, intensifying competition, and expenses related to decarbonization, all of which were squeezing profit margins. U.S. tariffs risk distorting the market further, as steel that would have been destined for the American market is now being diverted to other regions, including Europe.

"Many suppliers who currently supply the USA from Asia, from China will look for new markets and will try to supply more products to Europe. I think we should enter into talks with the US to find a good solution for the EU, Germany and the US. The EU must take action and set up certain border zones to prevent dump steel from coming into the EU," said Michels.

While the European Commission's announcement of counter-tariffs on U.S. goods indicates a firm stance, it also expressed a willingness to negotiate. This position resonates with many German steelmakers, who argue that the tariffs are counterproductive even for the U.S. steel industry.

"If you consider that the U.S. imports up to 21 million tons of steel, it won't be possible to produce these 21 million tons in the U.S. because the capacity simply doesn't exist," said Michels.

Some analysts predict that rather than protecting the U.S. steel industry, these tariffs may ultimately increase costs for American consumers.

US steel tariffs threaten German steel exports, spark EU retaliation

China's alcohol market is becoming increasingly appealing to foreign brands due to its diversified consumer base, rich spirits culture and complete digital ecosystem.

The Macallan, a renowned Scotch whisky brand under leading global spirits company Edrington Group, is focusing on strengthening its presence in China and leveraging its experience in the country to expand globally.

In an interview with China Global Television Network (CGTN), Francois Saurel, Regional Managing Director of Edrington for the Asia Pacific, shared his views on the Chinese market and factors that influence their strategies.

"China is very important for us, it has always been, and it's even more and more year after year. The immense opportunity of the market, the passion that the Chinese consumers, the Chinese clientele is showing for whisky, looks unstoppable," said Saurel.

The lion's share of China's liquor consumption is occupied by its traditional distilled spirit -- baijiu. For The Macallan, this apparent challenge is an opportunity in disguise.

"Actually, we don't see that as a competition at all. To the contrary, we see that as a very positive foundation for the future development of our brand, because if baijiu is so important in China, it's because spirits play a pivotal role in Chinese culture. It's about this kind of mediation, helping the conversation, the deepened conversation, the friendship, the social gathering of the Chinese clientele," he said.

Meanwhile, China's advanced digital ecosystem has also helped the brand grow, he stressed.

"Digital ecosystem is something very important. China is really where the digital is at the level of sophistication, which is on top in the rest of the world, unmatched in the rest of the world. And here we have advanced our capabilities in terms of platform, but also in term of resources, to make the most of that opportunity to engage with the Chinese clientele," Saurel said.

Scotch whisky brand sees opportunity in China's spirited liquor culture