In November 2025, German Chancellor Merz hosted a Steel Summit, stating plainly that the country’s steel industry is facing an existential crisis. The once-advocated concept of an open market can no longer cope with the current situation, forcing Germany and the European Union (EU) to roll out comprehensive protective measures to find a way forward for this pillar industry of the economy. This crisis is the combined outcome of rising trade protectionism, skyrocketing energy costs, and pressures from green transformation, with its impacts having spread across the entire European industrial system.
Plagued by Multiple Crises, Germany’s Steel Industry Struggles to Make Headway
The predicament of Germany’s steel industry is a concentrated reflection of shifts in the global manufacturing landscape and regional development contradictions, with three core challenges standing out.
Trade barriers cripple export capabilities: The United States has imposed a 25% tariff on imported steel and implemented a reciprocal tariff policy. In the first quarter of 2025, the EU’s steel exports to the US plummeted by 42% year-on-year, a reduction of approximately 1.5 million tons. As the core of Europe’s steel industry, German enterprises are not only hit by US tariffs but also face competition from low-cost steel products from Asia, leading to a continuous shrinkage of their export markets.
Energy and cost pressures overwhelm enterprises: The Ukraine crisis has triggered volatility in energy prices, plunging Europe’s energy-intensive industries into a cost dilemma. Steel manufacturing consumes large amounts of electricity, and German enterprises have long been burdened with higher energy costs than their international counterparts. Even with subsequent subsidy policies, it is difficult to fully offset the losses incurred earlier.
Transformation pains intersect with employment pressures: The EU requires the steel industry to achieve carbon neutrality by 2050, yet the threshold for new technologies such as hydrogen-based steelmaking is extremely high—an initial investment of 5 billion euros is needed to build a medium-sized hydrogen steel plant. Amid the pressures of transformation, Thyssenkrupp, Germany’s largest steel manufacturer, has reported losses in four out of the past five years and plans to cut 11,000 jobs by 2030. A total of 87,000 direct steel industry employees and 3.5 million indirectly related jobs across the country are now under threat.
The industry’s difficulties have sparked strong social reactions. In September 2025, Germany’s Metalworkers’ Union organized a strike involving 45,000 steel workers to protest against low-cost competition, rising environmental protection costs, and unemployment risks brought about by corporate mergers and acquisitions. Nearly 17,000 workers gathered in front of Thyssenkrupp’s headquarters, demanding that the government and enterprises work together to safeguard employment.
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EU and Germany Join Forces to Build a Three-Pronged Breakthrough System
Faced with the crisis, the German government and the EU acted quickly and in coordination, providing support for the steel industry from three aspects: trade protection, industrial support, and green transformation.
Trade Protection: Defending the Domestic Market
The EU took the lead in retaliation, imposing a 25% tariff on certain US products starting from April 2025 in response to the impact of US tariffs. On this basis, three core policies were rolled out: first, cutting steel import quotas by 15% and establishing a real-time trade data monitoring platform, which will automatically trigger additional protection measures if import growth exceeds the threshold; second, upgrading anti-dumping rules to include “environmental dumping” in the evaluation system, closing loopholes for origin circumvention; third, strengthening government procurement protection—starting from 2026, projects in key fields such as national defense and energy must give priority to using steel produced locally in Europe. German Chancellor Merz also promised to promote the EU-wide use of European steel in public construction projects, reversing the competitive disadvantages under the open market.
Industrial Support: Reducing Operational Costs
Controlling energy costs is the core of the policy. Germany announced that starting from January 2026, it will provide industrial electricity price subsidies for energy-intensive industries such as steel and chemicals. This policy has been approved by the EU and will directly reduce enterprises’ operational costs. In terms of production process optimization and equipment maintenance, steel enterprises have seen a surge in demand for efficient and safe material handling equipment. For heavy-load scenarios such as metallurgical trolleys and raw material transportation, DG Cranes DWB wheel block system is highly practical. With a load capacity ranging from 2.75 tons to 40 tons, its laser calibration technology can eliminate installation errors, and the specially hardened traveling wheels are not only suitable for high-speed operations but also protect the tracks—helping steel mills reduce equipment wear and maintenance costs.
At the EU level, an innovative financing model was launched: the Industrial Decarbonization Bank provides 100 billion euros in reverse auction subsidies, and enterprises must commit to clear emission reduction targets and employment guarantees to participate in the bidding. Meanwhile, a dedicated electricity market for the steel industry was established, allowing enterprises to sign 20-year fixed-price power purchase agreements with renewable energy generators to lock in long-term energy costs.
Green Transformation: Building Long-Term Competitiveness
The European Union (EU) has established a 30 billion euro Green Industry Fund, specifically to support the decarbonization of the steel industry. It also promotes the development of hydrogen-based steel industry clusters to reduce the transformation risks faced by individual enterprises. In the process of green transformation, German steel mills not only need to upgrade their main production line equipment but also optimize the safety and efficiency of maintenance and repair processes. The coal dust environment in steel mills, explosion-proof requirements in certain areas, and occasional power-free operation scenarios call for special lifting equipment. Kuangshan Cranes manual overhead cranes adopt a mechanical chain drive design, which avoids electrical sparks and can operate stably without external power. With a load capacity ranging from 1 to 20 tons and easy maintenance features, they are well-suited for scenarios such as equipment maintenance and material handling in steel mills, helping enterprises control operational costs during the transformation period.
German enterprises have also responded actively. Thyssenkrupp has partnered with Volkswagen to plan the commissioning of a direct reduction plant in 2027, which will produce low-carbon steel using green electricity and hydrogen. Starting from 2028, this steel will be supplied to the market, significantly reducing carbon emissions in the automotive supply chain. Another steel giant, Salzgitter, has joined hands with power company E.ON and chemical giant Linde to invest 50 million euros in a wind-powered hydrogen production project, which is expected to reduce carbon emissions by over 95% by 2050. The EU also plans to strengthen the Carbon Border Adjustment Mechanism (CBAM) by the end of the year, introducing a carbon intensity classification system to impose differentiated tariffs on imported steel with different emission levels, thereby reshaping the international competitive landscape through green standards.
Industry Self-Rescue and Global Impacts
Beyond policy support, German steel enterprises are also taking proactive measures to rescue themselves, seeking new growth drivers through technological innovation and industrial chain cooperation. The low-carbon steel developed by Thyssenkrupp has already secured pre-orders from BMW and Mercedes-Benz, with an expected supply of 500,000 tons in the first year of production (2027), which can accurately meet the decarbonization needs of the automotive industry. Giants like ArcelorMittal are also advancing zero-carbon steel plans, aiming to achieve an annual output of 400,000 tons of green steel by 2025 and increase it to 3 million tons by 2030.
The impact of this steel industry crisis extends far beyond the industry itself. The EU steel industry directly employs 320,000 people and indirectly supports 2.6 million jobs; its rise and fall are closely linked to the integrity of Europe’s industrial system and its strategic autonomy. Globally, trade disputes between Europe and the United States, as well as regional protectionist policies, may further fragment the steel market. Meanwhile, technological innovations and standard restructuring driven by green transformation are likely to reshape the division of labor in the global steel industry chain over the next few decades.
For Germany’s steel industry, the current crisis is both a challenge and an opportunity. Trade protection has gained valuable buffer time, energy subsidies have alleviated cost pressures, and green transformation points the way to long-term competitiveness. For U.S. enterprises focusing on advanced manufacturing, Germany’s approach—combining policy buffers with technological transformation—can also serve as a reference for the decarbonization of energy-intensive industries. However, this “breakthrough battle” still faces many tests: the sustained investment in huge transformation funds, the mature implementation of technical routes, and the dynamic game of international trade rules will all determine whether Germany’s steel industry can successfully navigate the pain and achieve rebirth.
