Global Editor’s Letter: Tariffs and policy shape 2025 market, 2026 to answer questions
Release Date:
2026-01-04
2025 will be remembered for punitive US tariffs, hard-hitting European policymaking and significant merger and acquisition activity – either concluded or anticipated. It has also raised significant questions for 2026, such as how will China’s new export licencing system impact trade, how will the market get to grips with the EU’s Carbon Border Adjustment Mechanism (CBAM) complexity, and will the EU and US agree the long-touted steel trading pact among “like-minded” countries?
2025 begins with hope
The year started on a positive note for demand prospects, with Eurofer forecasting EU demand to rebound in 2025 after a protracted decline, and the EU market anticipating policy measures to support industry. There was promise in Syria following an end to the war and change in regime, with significant reconstruction anticipated. In February, newly sworn-in US President Donald Trump meanwhile first agreed to hold talks with Russian President Vladimir Putin on ending the war in Ukraine.
M&A features prominently
On the M&A front, US Steel and Nippon Steel took joint legal action against outgoing US President Joe Biden’s blocking of the biggest steel industry M&A deal in recent times. Following months of intense negotiation with the new Trump administration, however, the Japanese steelmaking giant acquired US Steel in full, but with the US government retaining control over certain aspects like potential plant closures and headquarter relocation.
In Europe, the year started with Italian authorities receiving binding offers for the acquisition of the long-troubled Acciaierie d'Italia, which ultimately came to nothing. 2025 is ending with Flacks Group reported to be in pole position to acquire the former Ilva assets following a new round of tendering. Jindal Steel International has meanwhile been in talks since September over acquiring European steel giant thyssenkrupp Steel. If these deals are completed next year, 2026 will be a still more significant year than 2025 for steel M&A activity.
Trump’s tariffs test markets
Trump was inaugurated as US President for the second time and wasted no time reimplementing blanket 25% Section 232 tariffs on steel, which he later raised to 50%, bringing imports of many product categories to a halt. While US downstream steel users, including carmakers, screamed tariffs were hurting business, US mills took the opportunity to raise prices, with hot rolled coil peaking at $975/short ton and remaining elevated for the remainder of the year (see chart).
From: Kallanish
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