German steel sector in 'existential crisis,' Merz warns after summit

The steel industry of Germany is in an “existential crisis,” Chancellor Friedrich Merz said on Thursday, after a meeting with top leaders from the sector in Berlin.

Dubbed the “Steel Summit,” in Berlin, the talks aimed at sounding out ways to boost domestic manufacturers under pressure from new US tariffs, growing Chinese competition and weakening demand from struggling carmakers.

The sector needs protection against Chinese goods flooding the European market due to US trade barriers, Merz argued.

He also highlighted energy costs, warning that “without an effective lowering of the electricity price, this industry is not viable.”

The government of Germany is set to introduce a subsidised electricity price for companies after months of negotiations with Brussels.

“We expect to have clarity soon on whether this industrial electricity price can be approved,” Merz said. “The prospects are good.”

European steel must be given preference in procurement, he insisted. “We must protect our markets and protect our manufacturers.”

The 90-minute meeting at the Chancellery in the capital was also attended by industry and labour representatives, as well as a number of Cabinet ministers.

Merz described the exchange as a “very constructive discussion that resulted in complete agreement, including the conclusions to be drawn from it.”

He expressly thanked the employee representatives for their emotional contributions illustrating the human impact.

“We are not talking about abstract economic figures here, but about the fate of a key industry” and “the fate of employees and their families, who can and must count on and hope that politicians will work to preserve these jobs,” the chancellor added.

Steel boss warns jobs at risk

The president of the German Steel Association earlier warned that jobs are at risk of being lost for good if nothing is done to boost the sector’s resilience.

“We will not be able to bring back the value added that is currently being lost,” said Gunnar Groebler in a statement released after the talks.

Groebler, who also serves as chief executive at German steelmaker Salzgitter, stressed that workers in industrial regions are particularly concerned about their future.

“If you want to ensure social harmony, you have to secure the industrial foundation of this country,” he said.

Groebler praised Merz for convening the meeting, saying that strong representation by federal and state-level leaders as well as industry and unions illustrated that securing “the future of the steel industry is a joint national task.”

Describing steel as the foundation of any industry, Groebler said some 5.5 million jobs depend directly or indirectly on steel-related value chains.

In order to bolster the sector, he called for robust trade protection against price dumping, competitive energy prices, faster development of the hydrogen industry and stronger demand for low-emission steel made in Germany and the EU.