🔗 Share this article

The European Union have announced they will match the United States' steel tariffs, increasing to double taxes on imports to 50% in a decision condemned as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

Given that eighty percent of UK steel shipments destined for the EU, this policy shift creates the British steel sector's biggest ever challenge, according to the lobby group representing the sector.

New EU Proposals and Rules

Through its proposal submitted to the European parliament this week, the EU executive additionally suggested slashing the current allowance for tariff-exempt steel and requiring international producers to declare the origin of steel production to stop Chinese producers sneaking products in through third nations.

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

Overhaul of Current Framework

The proposals are intended to replace a quota system that has been in operation for the past seven years and which is due to expire in 2026 and is now seen as outdated. To do nothing could have been "catastrophic" for the industry, a European official said.

Sector Response and Concerns

Nevertheless, Gareth Stace, head of the industry body UK Steel, said Brussels increasing duties would create "the most severe challenge the UK steel industry has ever faced".

There were calls for the UK authorities to "recognise the urgent need to implement domestic protections to defend" the UK steel industry – which is affected by a 25% duty imposed by Trump recently – from the risk of vast quantities of world steel diverted away from American and EU markets.

This flood of imports "could be terminal for numerous steel companies.

Labor and Government Pressure

Alasdair McDiarmid, representative at steelworkers' union Community, said the new measures represented "a survival risk" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks immediately with the European Union on nation-specific duty-free quotas, pointing out that the UK was now the EU's primary trading partner.

Industry Background

Industry leaders in the EU have also been warning for months that the European steel sector faces being "wiped out" through the new 50% tariffs on exports to the US combined with rising energy prices and low-cost Chinese imports.

The steel industry on both sides of the Channel is considered a essential sector, providing basic materials in everything from skyscraper structures, wind turbines and transport infrastructure to household appliances and kitchenware.

Implementation and Future Actions

The new measures must be agreed by member states and the European parliament, with the European Commission president calling on national governments and MEPs to move quickly in support of the initiative.

Should approval be granted, the EU will reduce its current duty-free quota by 47% to 18.3 million tons a annually, a volume last seen in 2013. It will apply a 50% tariff on imports exceeding the limit and require nations exporting into the bloc to state the production origin to avoid bypassing of the measures.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs due to their strong economic ties in the EEA, the EU has said.

In addition to these measures, the EU is pursuing a "metals alliance" with the US to protect their respective economies from overcapacity.

EU must take immediate action, and firmly, prior to operations cease in large parts of the European steel sector and its supply networks.