Czech Steelmaker Calls for Tariffs to Back Europe’s Defense Push

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(Bloomberg) — The boss of the biggest Czech steelmaker said Europe must protect the struggling sector or risk undermining its drive to bolster its military capabilities.

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Metals companies in the European Union are grappling with excessive regulation, high energy costs and unfair competition from abroad, according to Petr Popelar, chief executive officer of Moravia Steel. He called for import tariffs and quotas, as well as more public funding to help the industry meet environmental targets.

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“It should be in Europe’s interest to preserve as much steel-making capacity as possible, so that strategic sectors like defense and infrastructure are not dependent on imports from places that are not our geopolitical allies,” Popelar said in an interview in Prague.

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Russia’s full-scale invasion of Ukraine and concern over US President Donald Trump’s commitment to NATO’s mutual defense clause is pushing Europe to spend billions to rearm. While the EU has strengthened protectionist measures to target a wave of cheap Chinese steel imports, the region’s industry is struggling to meet increased demand from the defense sector.

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Moravia Steel, which has 15,000 workers around central Europe, is the last Czech primary producer of the alloy after a unit of Sanjeev Gupta’s Liberty Steel went bankrupt last year. The outlook remains bleak, even as Moravia posted a modest profit in 2024 thanks to “drastic” cost savings, according to Popelar. 

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This year, the firm delayed most of a planned €1 billion investment — required under the EU’s Green Deal rules — to switch the smelter at its key Trinecke Zelezarny unit from coal to electricity.

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Without more state subsidies and regulatory relief from the EU, Moravia Steel might have to phase out primary production and import materials from abroad, the CEO said. 

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European defense manufacturers including Rheinmetall AG are urging the region’s steelmakers to ramp up production of military-grade metal. Popelar said declining output in Europe could undermine the continent’s efforts to become more self-reliant as it ramps up its defense spending.

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“Europe is perhaps the only market in the world that can’t sufficiently protect its steelmakers,” he said. “You can buy steel anywhere, but only until a military conflict actually starts.”

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Located in the easternmost corner of the Czech Republic, Trinecke Zelezarny was founded almost 200 years ago, and in the late 19th century it operated the biggest iron smelter in the Austro-Hungarian Empire. 

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Today, the plant is part of the Moravia Steel group and a major supplier to automotive and defense companies in central Europe. Its staple railway tracks are used around the Czech Republic and in Ukraine, where critical transport routes require constant repairs after Russian attacks.

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“Steel is indispensable — you need it everywhere, and it’s a question of national security,” said Popelar. “If we have to rely on imports from outside Europe, we will be shooting ourselves in the foot — in both feet, in fact.”

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