🔗 Share this article

The European Union revealed plans to mirror the United States' steel tariffs, effectively doubling taxes on foreign steel to fifty percent in a decision described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for UK Steel Exports

Given that eighty percent of British exports destined for the EU, this policy shift represents the British steel sector's most severe crisis, according to the industry association representing the industry.

European Commission Proposals and Rules

Through its proposal submitted to the EU legislature on Tuesday, the European Commission additionally suggested reducing the existing quota for tariff-exempt steel and obliging foreign suppliers to declare the origin of steel production to stop China sneaking products in through third nations.

EU steel sector was on the verge of collapse – we are protecting it so that investments can be made, reduce emissions, and regain competitiveness.

Replacement of Existing System

The proposals are intended to replace a quota system that has been in operation for the last seven years and which is set to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "disastrous" for the industry, one EU official stated.

Sector Response and Concerns

However, Gareth Stace, from the trade association British Steel, said Brussels doubling its tariffs would create "the most severe challenge the UK steel industry has encountered".

There were calls for the UK authorities to "recognise the urgent need to implement its own measures to protect" the UK steel industry – which is affected by a twenty-five percent duty from Trump recently – from the risk of vast quantities of world 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, assistant general secretary at steelworkers' union the industry union, said the proposed changes represented "an existential threat" to British steel production.

Unions and industry leaders urged Keir Starmer to begin talks immediately with the European Union on nation-specific tariff exemptions, noting that the United Kingdom was now the EU's No 1 export market.

Broader Context

Industry leaders in the EU have also been warning for months that their own industry confronts being "eliminated" through the increased duties on American market shipments combined with high energy costs and low-cost Chinese imports.

Steel on in both the UK and EU is considered a foundational industry, supplying basic materials in everything from skyscraper structures, wind turbines and railways to dishwashers and kitchenware.

Implementation and Next Steps

The new measures must be agreed by EU nations and the EU legislature, with the EU executive head calling on member states and European parliament members to act fast in backing the initiative.

Should approval be granted, 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 impose a 50% tariff on imports beyond the quota and oblige countries exporting into the bloc to state the production origin to avoid bypassing of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or duties because of their strong economic ties in the EEA, the European Union has confirmed.

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

EU must take immediate action, and decisively, prior to operations cease in significant portions of the EU steel industry and its supply networks.