• The EU is considering export restrictions on €4.4 billion worth of scrap metals and chemicals to the US, a retaliatory move following recent US tariff hikes on steel and aluminum.
  • The measures aim to secure raw materials for EU industries and align with broader decarbonization goals, but risk escalating transatlantic trade tensions.
  • Stakeholder consultations are underway, with final proposals expected by Q3 2025, while industry groups brace for potential supply chain disruptions.

Escalating Trade Measures

The European Commission is actively evaluating export curbs targeting scrap metals and chemical products bound for the US, a direct response to Washington's recent 25% tariffs on imported steel and aluminum. The proposed restrictions, covering €4.4 billion in annual trade, would mark one of the EU's most significant trade countermeasures since the 2018 steel tariff disputes.

People familiar with the discussions say the Commission is particularly focused on preventing potential supply shortages for European manufacturers, as global scrap flows could redirect to Europe following the US tariff changes. While scrap metals remain exempt from the new US duties for now, Brussels appears to be preempting market shifts that might disadvantage domestic producers.

Industry and Environmental Calculus

Metal recyclers and chemical exporters are already voicing concerns about losing access to key US markets, with some smaller operators warning of existential threats if the measures proceed. "This could fundamentally reshape recycling economics," said one industry representative who requested anonymity due to ongoing consultations.

Yet the move aligns with the EU's Steel and Metals Action Plan and broader Green Deal objectives, including the Carbon Border Adjustment Mechanism. By retaining more scrap domestically, policymakers hope to boost circular economy initiatives while reducing reliance on primary raw material imports. The timing coincides with upcoming Waste Shipment Regulation changes that will restrict scrap exports to non-OECD countries starting in 2027.

Diplomatic Fallout Looms

Trade experts warn the proposed curbs could trigger a fresh cycle of retaliation, with US officials closely monitoring the EU's deliberations. The Biden administration has so far maintained Trump-era metals tariffs despite earlier hopes for détente. One Brussels-based trade lawyer noted, "We're seeing hardening positions on both sides, with industrial policy increasingly trumping traditional trade liberalization agendas."

Market reaction has been muted thus far, though analysts note increased volatility in forward contracts for aluminum and copper scrap. The Commission declined to comment on whether the measures might expand to other materials, saying only that consultations with member states and industry groups remain ongoing.