EU's Plan to Match US Steel Tariffs Spurs 'Existential Threat' to UK's Steel Sector

The European Union have announced they will adopt Donald Trump's steel tariffs, increasing to double levies on imports to 50% in a move described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Exports

With 80% of British exports going to the EU, this policy shift poses the UK steel industry's largest crisis, according to the lobby group representing the sector.

European Commission Measures and Rules

Through its proposal presented to the European parliament on Tuesday, the EU executive additionally suggested cutting the existing quota for tariff-exempt steel and requiring international producers to disclose the origin of steel production to prevent Chinese producers diverting exports through other countries.

The European steel industry was on the verge of collapse – we are protecting it so that it can invest, reduce emissions, and become competitive again.

Overhaul of Existing System

The proposals are designed to replace a import framework that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as outdated. Inaction could have been "fatal" for the sector, one EU official said.

Industry Reaction and Concerns

However, Gareth Stace, head of the industry body UK Steel, said EU doubling its tariffs would create "the biggest crisis the UK steel industry has ever faced".

There were calls for the UK authorities to "recognise the critical necessity to put in place domestic protections to protect" the British steel sector – which is affected by a twenty-five percent duty from the US earlier this year – from the threat of millions of tonnes of global steel redirected from American and EU markets.

This surge in foreign steel "might prove fatal for numerous steel companies.

Labor and Government Calls

Alasdair McDiarmid, representative at labor union the industry union, said the proposed changes represented "a survival risk" to British steel production.

Labor and business representatives urged Keir Starmer to begin talks urgently with the European Union on nation-specific duty-free quotas, noting that the United Kingdom was now the European Union's No 1 trading partner.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for months that their own industry faces being "eliminated" through the increased duties on American market shipments along with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is described as a essential sector, providing basic materials in everything from skyscraper structures, wind turbines and railways to dishwashers and cutlery.

Adoption and Next Steps

These proposals require approval by EU nations and the European parliament, with the European Commission president urging member states and MEPs to move quickly in support of the proposal.

If the plan is ratified, the EU will reduce its existing tariff-free allowance by forty-seven percent to 18.3m tonnes a annually, a level last seen in 2013. It will impose a fifty percent duty on foreign steel exceeding the limit and oblige countries exporting into the bloc to state the production origin to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

These European nations will be exempt from import limits or tariffs because of their strong economic ties in the European Economic Area, the European Union has said.

In addition to these measures, the European Union is pursuing a "steel partnership" with the United States to ringfence their respective economies from overcapacity.

The European Union must take immediate action, and firmly, before operations cease in significant portions of the European steel sector and its value chains.