European stock markets demonstrated resilience at Wednesday’s open, trading higher despite the official implementation of US President Donald Trump’s doubled tariffs on steel imports.
While the broader market found positive momentum, the steel sector itself braced for a mixed impact, with analysts predicting potential benefits for European buyers but significant pressure on regional producers.
Shortly after the opening bell in London, European equities were broadly in positive territory.
The pan-European Stoxx 600 index opened nearly 0.3% higher, signaling investor appetite despite the heightened trade tensions.
Germany’s DAX led the gains, climbing 0.6%, while the French CAC 40 was 0.3% higher. London’s FTSE 100, however, was little changed in early dealings. Most major sectors across the European bourses started the day in the green.
The primary focus for markets on Wednesday is the activation of US tariffs.
Last week, President Donald Trump announced his decision to double the tariffs on steel imports from 25% to 50%, with the new rate taking effect on June 4.
This move has drawn criticism from the European Union, which stated that such an action “undermines” its ongoing trade deal negotiations with the US.
Steel sector braces for tariff impact
The implementation of these higher US tariffs is expected to have a complex and somewhat divergent impact on the European steel industry.
While seemingly counterintuitive, some analysts suggest that European steel buyers and certain manufacturers could paradoxically benefit from the increased US duties.
The logic is that these tariffs could put downward pressure on steel prices within the European region itself.
Josh Spoores, head of steel Americas analysis at CRU, explained to CNBC on Tuesday that the latest US tariffs will cause domestic steel prices in the US to increase.
This, in turn, will put pressure on Canada and Mexico, which are the largest steel exporters to the US.
Consequently, Spoores anticipates that this will redirect steel flows towards cheaper markets, such as Europe, thereby potentially favoring regional buyers with lower input costs.
However, the outlook for European steelmakers is less optimistic.
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