Metal and technical industry Merz wants to save the German steel industry - even with protective tariffs
German Chancellor Friedrich Merz sees the German steel industry in an existential crisis and wants to support the sector with protective tariffs.
06.11.2025, 16:56
SDA
"We are talking about the fate of a key industry," said the head of government after a "steel summit" at the Chancellery in Berlin.
Merz promised that the government would make a major effort to preserve the German steel industry. He supports proposals by the EU Commission to protect the domestic steel industry from cheap competition from countries such as China with significantly higher tariffs.
Vice Chancellor and Finance Minister Lars Klingbeil said that the foundation for a strong Germany is a strong industry - and the steel industry in particular. With regard to the billions in special funds for infrastructure, he said that the government wanted domestic and European steel to be used as a priority.
The "steel summit" was attended by other members of the cabinet as well as representatives of industry and trade unions and the minister presidents of federal states with steel industries.
Industry under severe pressure
The German steel industry is suffering from the crisis in its customer sectors, particularly the automotive industry. Added to this are increased energy prices, cheap imports, especially from China, high US import tariffs and high costs for the conversion to more climate-friendly steel production. The industry warned of a permanent loss of industrial jobs in Germany.
"We will not bring back the added value that is moving away today," said Gunnar Groebler, President of the German Steel Federation. "The pressure to act is great." The second chairman of the IG Metall trade union, Jürgen Kerner, chose a drastic image: the industry is in a "shock room".
Merz said that the steel industry was in a "crisis that threatened its very existence". The Christian Democrat expressly thanked employee representatives for their emotional contributions, which had explained what the situation meant for the companies. We are talking about the fate of companies, but above all about the fate of employees and their families, who can and must count on and hope that politicians will work to preserve these jobs.
The steel industry makes an important contribution to maintaining industrial value chains and economic resilience in Germany and Europe. Groebler, CEO of Salzgitter AG, made it clear that without a strong German steel industry, there would be a risk of dependency on other countries.
EU protective tariffs
The EU Commission has proposed measures to protect the domestic steel industry. The volume of duty-free imports is to be almost halved. The duty rate for imports in excess of this is to be doubled to 50 percent. Merz backed the proposals from Brussels. There must be effective foreign trade protection against state-subsidized steel, especially from China, which is flooding the markets.
This is different from what was considered right in earlier times, said Merz, citing open markets. "Unfortunately, those days are over." That is why domestic manufacturers need to be protected.
However, EU protective tariffs could have an impact on the already difficult negotiations with the USA, which imposes import tariffs of 50 percent on steel and aluminum - which the German government sharply criticizes.
Klingbeil said: "I think it is right that we always put rules-based trade first, but we must not end up being the ones who are stupid." That is why the protection of domestic industry must be stepped up. He suggested that this should be driven forward together with France.
At EU level, the issue continues to be compensation for more expensive production due to CO2 pricing. Berlin also wants to campaign for an early end to steel imports from Russia in the wake of new sanctions due to the war of aggression against Ukraine. Social Democrat Klingbeil said that no one could explain the fact that steel products were still being imported from Russia.
Relief for energy prices
The Merz government has already decided to reduce electricity grid charges. In addition, a state-subsidized, lower industrial electricity price is to be introduced for three years from 1 January 2026. Merz said that there is a good chance that the EU Commission will agree to this.
In addition, the so-called electricity price compensation is to be extended and expanded. This indirectly relieves companies of the costs of CO2 emissions trading. Groebler said that a combination of the industrial electricity price and electricity price compensation was necessary.
Give preference to domestic steel
A huge special fund is to be used in the coming years to upgrade the infrastructure, for example to renovate bridges and railroad lines. Domestic products should be given preference, said Klingbeil. He spoke of "more European patriotism".
More flexibility for restructuring
When converting the steel industry, which emits a lot of CO2, the aim is actually to produce "green" hydrogen based on renewable energies. However, this is still very expensive and not available in sufficient quantities. The German government is now pushing for more pragmatism in the European funding criteria - including the demand for more flexibility in the use of gas instead of hydrogen.
Klingbeil said that companies also have a duty to make their contribution to the success of the industry: "However, we also have a clear expectation of companies to secure their locations and maintain jobs. We need employment and location safeguarding agreements."
