Trade war with U.S. heightens crisis for Europe's steel industry

Europe's steel industry is at a crossroads. Rising energy costs, strict environmental rules, and growing competition have already strained the sector. Now, U.S. President Donald Trump's tariffs on European steel threaten to add more pressure.

The industry's struggles are clear in Dunaújváros, Hungary, where the once-thriving Dunaferr steel plant stands nearly abandoned. The factory, once the economic heart of the city, has been idle since its owner went bankrupt four months ago.

"It's hard to believe how much the population has shrunk in a city that once had 60,000 people," said Gábor Győri, a former steelworker who spent 30 years at Dunaferr. 

"Back then, everyone wanted to live near Dunaferr – it was the heart of the community. My parents always said to learn a trade and work for Dunaferr – that would ensure me a stable future until retirement."

That stability disappeared after the 2008 financial crisis, which triggered a drop in steel demand and stalled investment. Dunaferr, like many European steel producers, struggled to recover. The plant's decline led to mass layoffs and economic hardships for the city.

The plant once employed 14,000 people. Now, the furnaces are cold. The workers wait and hope a new buyer will bring it back to life, but the chances are slim. Across Europe, the steel industry is struggling with high costs and low demand – and now a trade war with a major export market. 

The European steel crisis extends beyond Hungary. In Brussels, industry leaders and union representatives are calling for urgent action.

"We hope that sooner or later, something will change—or at least that people will recognize how much this market in Europe is struggling," Győri said. "There needs to be more European-level support."

The European Union is carefully judging its reponse to new U.S. tariffs of 25 percent on imports, promising a proportionate response but talking a tough game, with trade commissioner Maroš Šefčovič vowing "we will not shy away from protecting our legitimate economic interests."

How Trump responds remains to be seen, but workers like Győri say help is needed now.

"If a country lets its steel industry collapse, it exposes itself to the world market in ways that cannot be repaired," he said. "Germany and the U.S. are supporting their steel industries."

For Dunaújváros, the stakes are high. If Dunaferr never reopens, the local economy could suffer devastating consequences. Property values will fall, businesses will struggle, and city revenues will shrink. For many in this town, steel is not just metal—it is history, identity, and survival.