June 12, 2019 / 9:28 AM / a month ago

ArcelorMittal boss says EU must respond further to Trump's steel tariffs

BERLIN (Reuters) - Europe urgently needs to take further measures to offset the impact of import tariffs imposed by U.S. President Donald Trump, the chief executive of steelmaker ArcelorMittal told a German newspaper in an interview published on Wednesday.

ArcelorMittal Chairman Lakshmi Mittal attends a parliamentary commission hearing at the National Assembly in Paris April 17, 2013. REUTERS/Benoit Tessier

The European Commission is currently reviewing its “safeguard” measures designed to limit incoming steel and prevent a surge of imports as a result of Washington’s 25% import tariffs, which have effectively closed the U.S. market.

“The EU has announced safeguard measures but they weren’t effective,” Chief Executive Lakshmi Mittal told Frankfurter Allgemeine Zeitung. “Further measures are urgently necessary given the import tariffs U.S. President Donald Trump has imposed on steel imports to the United States.”

Across Europe, the steel industry is struggling with cooling demand and growing supply, in part as steel tariffs deflect supplies from the United States, steelmakers say.

“The EU’s safeguard clauses have gaps - it’s too easy for exporters to evade them and the impact is massive: we have a steel glut.”

Mittal said imports into the European Union had increased by 30% to 40% since 2017.

He said it would be negative if the European Commission were to relax tariff protections for the steel industry in July, adding that the review of the safeguard measures should be completed before permitted import levels are reduced.

“From 1 July, imports to the EU can increase by 5% but we’d actually need a 20% reduction to return to 2017 levels,” Mittal said.

He added that quotas were also needed for individual export countries for hot-rolled coil - steel that is heat processed into metal sheets used for car bodies and household appliances.

Mittal said he was concerned about the European steel situation, saying the trade conflict between the United States and China is also hurting Europe.

He also pointed to growing tensions in trade relations between the United States and Europe, a weakening economy in China and Brexit uncertainty.

Mittal said there was around 500 to 550 million tonnes of overcapacity in the steel industry, amounting to a quarter of global steel production.

To tackle that overcapacity, state subsidies need to be dismantled in China and unproductive manufacturers taken off the market, Mittal said.

Asked if his son Aditya would one day succeed him as chief executive of ArcelorMittal, Mittal said: “Aditya has done great work for our company in the last 22 years.”

“He has demonstrated his abilities and leadership qualities. I think he’d be a strong CEO.”

Reporting by Michelle Martin; Editing by David Evans and Jan Harvey

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