Trump's 50% steel tariffs will drop European prices and soar in the U.S.

U.S. President Donald Trump visited Irvin Works in West Mifflin, Pennsylvania, during his visit to US Steel, and received a gold helmet on May 30, 2025 to mark the "partnership" between Nippon Steel and US Steel.

Saul Loeb | AFP | Getty Images

U.S. President Donald Trump once again surprised the market after he announced Friday that he would impose tariffs on 25% of steel imports on Wednesday.

But while the impact of inflation on domestic prices in the United States will be widely expected to be severe, according to analysts, the impact in Europe will be more mixed – some buyers and manufacturers will be able to benefit from lower prices.

"It's definitely a surprise. The United States already has higher steel prices than anywhere else, it's a net importer and needs sales. It's all about raising prices here," Josh Spoores, head of CRU American Analiver of Cur American Analysis, told CNBC on Monday.

Canada and Mexico are the largest steel exporters in the United States, including Brazil, South Korea and Germany.

Spoores said the latest tariff news could redirect steel to other markets such as Europe, pressured toward price drops.

“Some manufacturers in Europe may make better construction products that are reinforced at home and exported to the United States as prices rise,” he continued. “Automotives, construction products and appliances are all products that will feel the impact.”

In Europe, he said, steel buyers could be winners.

However, not all companies benefit.

Morningstar's stock analyst Rella Suskin pointed out in an emailed comment that Germany's BMW Separate the expected impact of different tariffs in its 2024 results and mark the negative impact of "high three-digit millions" from the existing 25% steel and aluminum tariffs.

BMW shares fell 1.8% in trading Monday afternoon, while the broader European auto industry fell 1.8%. Suskin continued that some of the impact of the 50% tariff could also be offset by the recent easing of Trump's car restrictions and marked the potential for a future deal between the White House and German automakers.

Denmark wind energy developer land Citi analysts led by Jenny Ping said in a report to clients that it could also be negatively affected because the United States does not have a local offshore wind turbine supply chain.

Erosion of steel manufacturers' edges

According to forecasts by British steel market consulting firm MEPS International, Trump's latest move will have a significant impact on the steel industry in Europe - the 25% liability imposed in March is still significant.

"The demand for steel throughout Europe is already very low, eroding prices and profit margins for domestic steel manufacturers. This forces many producers to cut production and close factories as they struggle to compete with low-cost steel imports produced in countries with much lower production costs," she said.

The EU criticized Trump's announcement over the weekend, threatening to confront and believed that the decision "added uncertainty to the global economy and increased costs for consumers and businesses on both sides of the Atlantic."

Ayub noted that any cuts 389,000 tons of steel produced in the EU, which was exported to the U.S. in 2024 due to trade barriers, could “intensify the over-steel in Europe, impose excessive supply in Europe, and increase pressure to lower sales prices.”

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She agreed that some of the low-cost Asian steel that was originally scheduled to be in the United States would be moved to Europe. “Even if EU and UK trade defense measures are taken, this could undermine domestic producers’ attempts to maintain profitability.”

Instead, even if further ups occur now, U.S. steel manufacturers may benefit from higher sales prices, even if the costs of U.S. manufacturers and Stoke inflation increase, she added.

Uncertainty raised in the UK

It is unclear what Trump's latest sensation for the UK may mean, which announced an overview of the U.S. trade deal in May but has not yet received exemptions from steel tariffs.

The British industrial organization Gareth Stace said in a statement that domestic steel companies were “concerned that orders would be cancelled now, some of which could be shipped on the Atlantic Ocean.”

Overall, Trump's latest announcement added headaches to almost all businesses, said Josh Spooles of Cruise.

"I don't want this to be a three-month policy, even if it's not clear for three weeks."

“These tariffs are at such high levels that in the United States, they will affect a huge community of manufacturers that have made a huge contribution to GDP and employment, so there will be lobbying for that.”

- Ganesh Rao of CNBC contributed to the story.