Rising trade tensions between the US and Europe over control of Greenland could raise raw material costs for US electric arc furnace (EAF) steelmakers importing prime scrap.
President Donald Trump threatened on 17 January to impose an additional 10pc tariff on US imports from the UK, Denmark, Finland, France, Germany, the Netherlands, Norway and Sweden from 1 February, because of their participation in a military mission in Denmark's Greenland territory, which he is threatening to annex.
The tariffs will rise to 25pc from 1 June if a deal for US ownership of Greenland is not reached, Trump said on his social media platform. Greenland is a self-governing island under Denmark's control.
The Netherlands, Poland, Sweden and the UK are major suppliers of prime scrap to the US. US imports from those nations have been subject to tariffs since April 2025, at rates of 10pc from the UK and 15pc from the EU.
EAF steelmakers typically rely on European prime scrap imports to relieve pressure on domestic supply and #1 busheling pricing.
US steelmakers have paid higher raw material costs due to import tariffs over the last year as stricter import controls have significantly supported the domestic steel market and offset the added import fees.
Prime scrap imports from the Netherlands, Poland, Sweden and the UK rose by 61pc in 2025 to 403,000 metric tonnes (t) between January and October 2025, compared with the same period of 2024, despite the April tariffs. But mills shifted the import ratio to favor shipments from the UK because of its lower tariff rate. UK prime scrap shipments accounted for 68pc of all European shipments between April and October, compared with only 10pc in the same period of the prior year.
This sourcing shift could signal that US mills will adopt a similar pattern if tariff rates rise by an additional 10pc in February and to 25pc in June.
Canada and Mexico have been the largest sources of prime scrap imports to the US, at around 34pc between January-October 2025. Any shift to North American consumption could support scrap suppliers with large prime scrap inventories that have been overhanging the US market over the last year.
EU leaders will meet on 22 January to agree on the bloc's response to Trump's threat to annex Greenland and to impose the additional tariffs.
