Germany's steel and aluminum industries braced for U.S. tariffs

The United States has increased import tariffs on steel from 25 percent to 50 percent and on aluminum (aluminium) from 10 percent to 50 percent.

While the move is aimed at boosting domestic U.S. production in both sectors, many exporters in Europe are questioning the actual outcome.

"The overall U.S. capacity is not big enough to fulfil the American demand for all the goods produced in the United States" says Marius Baader, the Managing Director of Aluminium Deutschland, which represents Germany's aluminum industry.

"Companies (in the U.S.) don't have the chance to substitute the imports that quickly because the aluminium industry needs a lot of lead time to be able to perform on a certain level of quality. Aluminium cans for example, are a high-tech product because the alloy used is well defined. At the end of the day, the (U.S.) consumer needs to pay the tariffs."

The United States is heavily reliant on aluminum imports with roughly half of the country's demand coming from abroad. The EU supplies about 5.5 percent of that, while two percent of Germany's total production goes to the U.S.

"The absolute amount doesn't seem to be significant, but it is of course because it disrupts trade relationships we have established for years and years" Baader points out.

Many in the steel industry are also puzzled by the U.S. decision to increase tariffs, especially now.

EU steel accounts for some 4 million metric tons of US imports, Germany providing a quarter of that.

Thomas Michels is chief operating officer for Germany's BENTELER Steel, which produces around 650,000 tons of steel per year.

Some of this is sent to BENTELER's plant in the U.S. state of Louisiana.

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

He says that the price for steel is already increasing in the U.S.

"This of course means that in the end, taken together, the tariffs are more likely to hit the end consumers in the U.S."

Both industries in the EU have already been struggling due to rising energy costs and business cycle challenges, such as in the automotive and construction industries. says Baader. "This is just another pressure point on the European industry."

That's especially the case if other countries, also subject to the U.S. tariffs, begin sending their supplies to alternative markets, such as the EU.

The European Union and the United States are actively engaged in negotiations concerning import tariffs on all goods, but there are mamny challenges to overcome.

In the meantime, Baader says "people are concerned about how much longer can withstand these challenges."