British Steel is under considerable pressure at though, as the European steel sector wrestles with a wave of Chinese imports. The large U.S. import tariffs imposed on Chinese companies have created the most significant push. Consequently, most of these firms are now shipping their goods to European markets. European steel producers like British Steel are riding the storm of an extreme market glut. This crisis has led to thousands of factory closures and devastating economic dislocation.
The unintended consequence of the high tariffs recently imposed by the United States on imported European automobiles have sent shockwaves across Europe. Chinese companies have had a difficult time exporting to the U.S. as the barriers became raised. Now, they are focusing their sights on the European market, inundating it with cut-rate steel products. The current economic climate has only increased the pressure on British Steel and other European producers. When it comes to competing on price, their hand is completely tied.
The impact of this market disruption has been devastating. The flood of cheap Chinese steel has forced some other producers, such as chemicals giant Ineos, into announcing closure of manufacturing plants. Our chemical and textile sectors are experiencing tremendous strain at this point in time. They urgently need action to address the oversupply that is threatening the stability of all these industries.
European leaders must also acknowledge the urgent challenges facing the steel sector. To be clear, these are not just proposals – they are making tangible progress to reduce the adverse effects of these imports. Negotiations are still taking place on protective measures that would protect domestic industries from the harmful impacts of Chinese competition. Meanwhile, the European steel industry is standing up to this tidal wave of low-cost imports. Now British Steel has entered the fray, calling for similar protection to defend their interests.
This dilemma is not just unique to British Steel – it’s a symptom of the wider crisis that is plaguing the entire European steel industry. Manufacturers find it very hard to remain profitable and create jobs in face of the headwinds created by foreign competition. The dramatic developments of the past few weeks highlight how Europe’s nations must act in concert to protect their economic interests from outside forces.