European Union's Proposal to Match US Steel Tariffs Poses 'Existential Threat' to UK's Steel Sector

EU officials have announced they will adopt Donald Trump's import duties on steel, effectively doubling levies on foreign steel to fifty percent in a move described as "a critical danger" to the industry in Britain.

Major Challenge for UK Steel Exports

Given that 80% of British exports destined for the European Union, this policy shift represents the British steel sector's biggest ever crisis, according to the lobby group speaking for the sector.

European Commission Proposals and Regulations

Through its proposal presented to the EU legislature on Tuesday, the European Commission additionally suggested slashing the existing quota for tariff-exempt steel and obliging foreign suppliers to disclose where the steel was melted and poured to prevent China diverting exports through other countries.

The European steel industry was on the verge of collapse – we are protecting it so that investments can be made, decarbonise, and become competitive again.

Replacement of Current Framework

These measures are designed to replace a import framework that has been in operation for the past seven years and which is set to expire in 2026 and is now considered ineffective. To do nothing could have been "catastrophic" for the sector, a European official stated.

Industry Reaction and Warnings

Nevertheless, Gareth Stace, from the trade association UK Steel, stated Brussels increasing duties would pose "the biggest crisis the British steel sector has ever faced".

There were calls for the UK authorities to "acknowledge the urgent need to put in place domestic protections to protect" the UK steel industry – which is affected by a twenty-five percent tariff imposed by the US earlier this year – from the risk of vast quantities of world steel diverted away from US and European markets.

This surge in foreign steel "could be fatal for numerous steel companies.

Labor and Government Pressure

Alasdair McDiarmid, representative at labor union Community, said the proposed changes posed "a survival risk" to UK steel.

Labor and business representatives called on Keir Starmer to begin talks urgently with the EU on country-specific duty-free quotas, pointing out that the United Kingdom was now the EU's No 1 trading partner.

Industry Background

Sector representatives in the European Union have also been warning for months that the European steel sector confronts being "wiped out" through the new 50% tariffs on American market shipments combined with high energy costs and low-cost Chinese imports.

The steel industry on both sides of the Channel is considered a essential sector, providing basic materials in products ranging from skyscraper structures, renewable energy equipment and railways to household appliances and kitchenware.

Implementation and Future Actions

The new measures must be agreed by EU nations and the European parliament, with the European Commission president urging member states and MEPs to act fast in support of the initiative.

Should approval be granted, the European Union will reduce its current duty-free quota by forty-seven percent to 18.3m tonnes a annually, a volume previously recorded in 2013. It will apply a 50% tariff on foreign steel exceeding the limit and oblige countries shipping to the EU to state the production origin to prevent circumvention of the measures.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or duties due to their close trading relationship in the European Economic Area, the EU has confirmed.

In addition to these measures, the EU is seeking a "metals alliance" with the United States to protect their national industries from overcapacity.

The European Union needs to act now, and decisively, prior to all lights go out in large parts of the European steel sector and its value chains.