A coalition of five German states – Lower Saxony, North Rhine-Westphalia (NRW), Saxony, Saarland and Bremen – are escalating pressure on the German government and the European Union ahead of a crucial meeting at the Chancellery, advocating for significantly higher tariffs on steel imports. The states’ joint declaration, released on Wednesday, underscores growing anxieties within Germany’s industrial heartland regarding unfair competition and the potential for deindustrialization.
The proposal centers on the introduction of a tiered system, presented as a “transitional solution” towards a fair and rules-based global trade environment consistent with World Trade Organization (WTO) standards. The states propose a customs quota system within the EU, coupled with a “highly effective punitive tariff” for imports exceeding those quotas – a level they want to mirror the 50% tariffs currently in place in the United States. This aggressive stance is intended to protect domestic steel producers battling competition from countries perceived to be engaging in unfair trade practices.
Beyond simply raising tariffs, the proposal seeks to broaden the scope of protection to encompass the entire steel value chain, including raw materials and processed products. However, the states acknowledge the risk of disproportionately impacting downstream processing industries within the EU’s internal market, emphasizing the need to safeguard their international competitiveness. They urge for the swift adoption of the EU Commission’s proposed new trade instrument, aiming to create a framework providing stability for all stakeholders.
A key component of the proposal is a complete ban on imports of steel and steel products originating from Russia, reflecting heightened geopolitical concerns and a desire to further limit Moscow’s economic leverage.
The declaration also highlights the urgent need for a fully operational Carbon Border Adjustment Mechanism (CBAM) by January 2026, warning that failure to do so would necessitate the continued allocation of free emissions certificates, effectively undermining decarbonization efforts. Furthermore, reliable hydrogen supply and secure power purchase agreements are deemed essential for the transformation of Germany’s steel industry, with the states warning that decarbonization of primary steel production is impossible without competitively priced hydrogen and a timely completion of the hydrogen core network.
NRW Minister President Hendrik Wüst of the CDU warned that the Emissions Trading Scheme (ETS) must not become a “program for deindustrialization” asserting that climate protection requires companies to be able to invest in modern technologies. The escalating demands from these powerful regional leaders underscore a growing disconnect between Germany’s commitment to climate action and the potential economic consequences for its vital industrial sectors, potentially forcing a difficult balancing act for Chancellor Scholz and the federal government.
