Key Points
- European metal producers are facing a severe shortage of scrap metal.
- The problem was caused by President Trump’s new 50% tariff on steel and aluminum, which led U.S. companies to purchase more European scrap.
- The shortage poses a threat to Europe’s climate goals, as recycling scrap metal is a crucial part of reducing emissions.
- The industry is calling for immediate export restrictions, saying they can’t wait for a larger trade deal.
President Donald Trump’s new tariffs are causing a scrap metal crisis in Europe. Metal producers across the European Union are now lobbying their governments to impose emergency export duties or other restrictions on scrap metal shipments in the “next few weeks.”
The problem began when Trump imposed a 50% tariff on imported steel and aluminum. This made U.S. companies desperate for tariff-free scrap metal, and they began buying it in massive quantities from Europe. As a result, European scrap exports to the U.S. nearly tripled in the first three months of this year. This has created a shortage of scrap in Europe, driving prices to soar.
This poses a significant challenge for European metal producers for two reasons. First, it hurts their bottom line. But more importantly, it threatens to wreck their plans to reduce carbon emissions. Recycling metal uses far less energy—up to 95% less for aluminum—so a shortage of scrap could force them to use more polluting methods. One industry CEO warned that their green initiatives would go “down the toilet” if they can’t get enough scrap.
The metal industry says it can’t wait for the EU to work out a broader trade deal with Trump, which might not happen for months. They are calling for “extraordinary action” now, including a special export authorization system that has only been used before during the COVID-19 pandemic. Europe’s scrap sellers, however, are opposed to any restrictions, arguing that there is no shortage.
