European markets set to open higher, shrugging off Trump’s 50% metals tariffs

The European steel industry is set to see a mixed impact on prices after U.S. President Donald Trump said tariffs on steel imports will double from 25% to 50% on June 4.

The latest tariffs will cause U.S. domestic prices of steel to increase, which will put pressure on Canada and Mexico, the biggest steel exporters to the U.S. This will redirect steel to cheaper markets like Europe, favoring regional buyers, Josh Spoores, head of steel Americas analysis at CRU, told CNBC on Tuesday.

European steelmakers will meanwhile be hard hit by the duties and forced to lower prices, according to Kaye Ayub, head of price analysis and forecasts at U.K.-based steel market consultancy MEPS International.

“Steel demand is already low across Europe, eroding prices and domestic steelmaker’s profit margins. This has forced many producers to cut production and close plants as they struggle to compete with low-cost steel imports produced in countries where production costs are much lower,” Ayub said.

Any curtailment of the 3.89 million metric tons of EU-produced steel that was exported to the U.S. in 2024 due to trade barriers would “likely exacerbate steel oversupply in Europe, applying increased downward pressure to selling prices,” Ayub noted.

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— Sawdah Bhaimiya, Jenni Reid

Good morning from London. This is CNBC’s live blog covering all the action in European financial markets on Wednesday, as well as business news, analysis, earnings and data.

Futures data from IG on Wednesday morning suggests London’s FTSE will open 6 points higher at 8,788, Germany’s DAX up 56 points at 24,135, France’s CAC 40 up 20 points at 7,780 and Italy’s FTSE MIB 60 points higher at 40,155.

U.S. tariffs are once again in focus on Wednesday after President Donald Trump said last week that he will double tariffs on steel imports from 25% to 50% on June 4.

The European Union criticized the hike, saying such a move “undermines” its trade deal negotiations with the U.S. An EU spokesperson said that the bloc was “prepared to impose countermeasures.” A temporary 25% tariff remains for the U.K. until its trade deal with the U.S. comes into force.

Nonetheless, analysts say European steel buyers and some manufacturers could benefit from the higher metals tariffs as they could put downward pressure on steel prices in the region.

— Holly Ellyatt

It’s a quiet day for earnings and data, although Spanish and Italian services purchasing managers’ index data, which measures activity in the sector, will be released.

Poland’s central bank will also be announcing its latest monetary policy decision on Wednesday.

— Holly Ellyatt

Asia-Pacific markets advanced overnight, boosted by a tech rally on Wall Street that was led by chipmaker Nvidia on Tuesday.

Shares in the artificial intelligence darling advanced nearly 3%, extending Monday’s gains and driving Nvidia’s market cap past Microsoft’s for the first time since January. Chip companies Broadcom and Micron Technology rose more than 3% and 4%, respectively.

South Korean markets also rose overnight as opposition party leader Lee Jae-myung won the presidential election.

Meanwhile, U.S. stock futures were little changed early Wednesday after the S&P 500 notched a second straight day of gains.

The recent comeback rally has investors increasingly confident stocks have turned a corner on tariffs, especially after a series of reversals from President Donald Trump convinced traders the White House is mainly wielding high levies as a negotiating tool.

A federal court striking down Trump’s tariffs just last week added to hopes the market has priced in the worst of the tariffs, though they were later reinstated temporarily by an appeals court.

— Holly Ellyatt, Sarah Min and