site.btaBulgarian Steel Production not Expected to Take Direct Hit from US Tariffs

Bulgarian steel production is not expected to be directly affected by the 25% global tariffs on all steel and aluminum imports to the United States, which come into effect Wednesday. "Regarding aluminum, there has been export of products, and tariffs were introduced during the first term of this president. Despite this, we still export to the US markets, but now it will be more difficult," said Politimi Paunova, Executive Director of the Bulgarian Association of the Metallurgical Industry (BAMI). She was approached by BTA Wednesday to comment the impact that the US tariffs are expected to have on the Bulgarian industry.

She added that there will be direct negative effects for the European industry as a whole.

Bulgaria does not export steel to the US and does not produce aluminum. However, it does export aluminum products to the US and other countries worldwide, with Europe being its largest market. According to the expert, it is early days to make calculations on the potential damage to the industry, both for Bulgaria and the EU, since an assessment also needs to account for the counter-tariffs on US goods that the EU has announced Wednesday.

Indirect effects

Paunova admitted that problems will arise due to the indirect impact of the new US tariff policy. Countries that trade with the US will now have to redirect their production to other markets, which will disrupt the global market, she explained. She also noted that the US is a significant market not only for European companies in the sector but also for those from China and developing countries. After the introduction of the high tariffs, some products will no longer be exported because it will no longer be economically viable. In such cases, these products will either remain in the European markets or be redirected to third countries, Paunova added.

Following the closure of the Kremikovtsi steel mill, Bulgaria now has only two steel producers left: Promet and Stomana Industry, which together produce around 1,100 to 1,200 tons of rolled steel annually. The majority of the production from these two companies is exported to the EU, mainly to countries in the region, such as Romania and Greece. There is also significant import of products for domestic consumption, including those that are produced locally.

According to Politimi Paunova, the current protective trade measures introduced by the European Commission are not effective enough and are often bypassed. Given the challenging situation in the steel sector, which the European Commission has recognized as a priority, a review and update of the common trade policy is now planned to better protect European production.