European Union's Plan to Match Trump's Steel Tariffs Poses 'Existential Threat' to British Steel Industry

EU officials have announced they will adopt the United States' steel tariffs, effectively doubling levies on imports to 50% in a action described as "a critical danger" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

With 80% of British exports going to the EU, this policy shift creates the UK steel industry's biggest ever crisis, according to the industry association representing the sector.

New EU Measures and Regulations

Through its proposal submitted to the European parliament this week, the European Commission also proposed reducing the existing quota for tariff-exempt steel and obliging international producers to state where the steel was melted and poured to stop Chinese producers diverting exports through third nations.

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

Replacement of Current Framework

The proposals are intended to replace a import framework that has been functioning for the past seven years and which is set to expire in 2026 and is now seen as ineffective. To do nothing could have been "catastrophic" for the industry, a European official said.

Industry Reaction and Concerns

However, Gareth Stace, from the trade association UK Steel, said Brussels increasing duties would create "the biggest crisis the UK steel industry has ever faced".

He called on the government to "recognise the critical necessity to implement domestic protections to protect" the UK steel industry – which is still reeling from a twenty-five percent duty from the US recently – from the threat of millions of tonnes of global steel redirected from American and EU markets.

This surge in foreign steel "could be fatal for many of our remaining steel companies.

Labor and Government Calls

Union leaders, representative at labor union Community, said the new measures represented "a survival risk" to UK steel.

Labor and business representatives urged Keir Starmer to start negotiations urgently with the European Union on country-specific tariff exemptions, pointing out that the United Kingdom was now the European Union's primary export market.

Broader Context

Industry leaders in the European Union have also been warning for several months that the European steel sector faces being "eliminated" through the new 50% tariffs on exports to the US combined with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is considered a essential sector, supplying basic materials in products ranging from building frameworks, wind turbines and railways to dishwashers and kitchenware.

Implementation and Next Steps

These proposals require approval by EU nations and the European parliament, with the EU executive head urging national governments and MEPs to move quickly in backing the proposal.

If the plan is ratified, the EU will reduce its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a volume previously recorded in 2013. It will apply a fifty percent tariff on foreign steel exceeding the limit and oblige nations shipping to the bloc to state the production origin to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their strong economic ties in the EEA, the European Union has said.

Alongside the proposal, the European Union is seeking a "metals alliance" with the US to ringfence their respective economies from excess production.

EU must take immediate action, and decisively, prior to all lights go out in large parts of the EU steel industry and its supply networks.