President Trump's steel tariffs have caused a drop in U.S. imports, which could give the Trump administration leverage in its upcoming trade talks with the European Union.

Overseas steelmakers who are locked out of the U.S. markets are dumping their excess capacity in Europe at bargain prices, creating trouble for Europe's main domestic producers that are struggling to compete.

The American Iron and Steel Institute reported Wednesday that the U.S. imported a total of 2.2 million net tons of steel in September 2018, a 26 percent decline from the previous month. The same day, the European steel association Eurofer said steel consumption on the continent had risen by just 0.6 percent, but imports increased by 10 percent over last year.

That's the result of countries like Russia and other Asian nations dropping prices to sell in Europe because the 25 percent U.S. tariff imposed by the Trump administration made it impossible to sell there.

"'Trade deflection' is often observed for standardized commodities, like steel. This is a big instance, and indeed it does give the Trump team more leverage. The EU might limit imports from China, but it will be reluctant to limit imports from Korea, Japan, or Turkey because of existing free trade agreements," said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics.

U.S. and European Union trade negotiators are meeting in Washington, D.C., this week to get started on talks first started back in July to reduce nontariff barriers between the continents. The U.S. steel tariffs are expected to be among the issues discussed, the EU keen to get an exemption to them.

Trump openly conceded in an an interview with the Wall Street Journal Tuesday that the tariffs are mainly a tool to wring concessions out of trade partners. "I’m using tariffs to negotiate," he said, pointing to the recent U.S.-Mexico-Canada Agreement on trade as proof. “I could never have done it without tariffs."

Backers of the administration's trade policies say the turnabout is good news. "The U.S. had the job of eating global steel overcapacity for many years. [Trump's] tariffs meant we quit that job. EU, Canada, and India now are candidates for that job. They don’t want that job. EU and Canada are now using measures to keep out global overproduction," said Michael Stumo, CEO for the Coalition for a Prosperous America, a business-labor coalition that backs Trump's trade policies.