US President Donald Trump’s 50% tariffs on steel and aluminium imports have come into effect today. However, this move may inadvertently boost Germany’s defence industry, which is looking to reap benefits from the increased demand for steel in the production of armoured vehicles.
The German steel industry has been struggling due to cheap imports from China, high energy costs, and a transition to climate-friendly hydrogen. With Europe launching a Steel and Metals Action Plan to address unfair trade measures, Germany’s defence industry may be poised to make a comeback.
Rheinmetall, a major arms manufacturer, has seen its share price surge since the start of the year following promises from the new German government to increase spending on defence. The company expects demand for armoured steel to rise due to diversifying supply chains and local production.
Tobias Aldenhoff, head of economic and trade policy at the German Steel Association, believes the industry is under pressure due to environmental challenges and global oversupply. However, he noted that improved framework conditions could lead to a positive effect on steel demand from car and mechanical industries.
The industry faces significant challenges, including a decline in employees over the past few decades. Despite this, experts argue that Germany’s defence industry may be able to capitalize on increased demand for steel due to global oversupply and tariffs imposed by other countries.
The potential sale of Thyssenkrupp’s steel division to Czech billionaire Daniel Křetínský may signal a significant loss for the German economy. However, the company will retain 50% ownership even if Křetínský acquires the remaining stake, indicating that the industry’s decline is largely driven by external factors.
As the US tariffs take effect, Germany’s defence industry may drive a steel boom, despite facing significant challenges and internal struggles.
Source: https://www.euronews.com/business/2025/06/04/bulgaria-to-adopt-the-euro-as-ecb-and-european-commission-give-green-light