EU's Proposal to Align With US Steel Tariffs Poses 'Existential Threat' to UK's Steel Sector

EU officials revealed plans to mirror Donald Trump's steel tariffs, increasing to double taxes on imports to 50% in a action described as "a critical danger" to the industry in the UK.

Unprecedented Crisis for British Steel Exports

With 80% of British exports destined for the European Union, this policy shift creates the British steel sector's biggest ever crisis, according to the industry association speaking for the industry.

New EU Proposals and Regulations

Through its proposal presented to the European parliament on Tuesday, the European Commission additionally suggested reducing the existing quota for tariff-exempt steel and requiring foreign suppliers to state where the steel was melted and poured to stop Chinese producers diverting exports through third nations.

EU steel sector was on the verge of collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

The proposals are intended to supersede a import framework that has been functioning for the last seven years and which is due to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "fatal" for the sector, one EU official said.

Industry Reaction and Warnings

Nevertheless, Gareth Stace, head of the industry body UK Steel, said EU increasing duties would create "the biggest crisis the British steel sector has encountered".

There were calls for the government to "recognise the critical necessity to put in place its own measures to protect" the British steel sector – which is still reeling from a 25% tariff imposed by Trump recently – from the threat of vast quantities of global steel redirected from US and European markets.

This flood of imports "could be terminal for many of our remaining steel companies.

Labor and Government Calls

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

Unions and industry leaders called on the UK government to begin talks immediately with the European Union on country-specific duty-free quotas, pointing out that the UK was now the European Union's No 1 export market.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for several months that the European steel sector faces being "eliminated" through the increased duties on exports to the US along with high energy costs and cheap Chinese competition.

The steel industry on both sides of the Channel is described as a essential sector, supplying basic materials in everything from building frameworks, renewable energy equipment and railways to dishwashers and kitchenware.

Implementation and Next Steps

These proposals require approval by EU nations and the EU legislature, with the European Commission president calling on national governments and MEPs to move quickly in support of the proposal.

Should approval be granted, the European Union will cut its existing tariff-free allowance by forty-seven percent to 18.3m tonnes a year, a level previously recorded in 2013. It will impose a 50% duty on foreign steel exceeding the limit and require countries exporting into the bloc to state where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and Global Partnerships

These European nations will be exempt from tariff quotas or duties due to their strong economic ties in the European Economic Area, the European Union has confirmed.

In addition to these measures, the EU is seeking a "steel partnership" with the US to protect their respective economies from overcapacity.

The European Union needs to act now, and firmly, before all lights go out in large parts of the European steel sector and its supply networks.