European Union's Plan to Match US Steel Tariffs Poses 'Survival Risk' to British Steel Sector

The European Union declared plans to match Donald Trump's import duties on steel, increasing to double taxes on foreign steel to 50% in a move condemned as "an existential threat" to the industry in Britain.

Unprecedented Crisis for British Steel Exports

With eighty percent of British exports going to the EU, this policy shift poses the British steel sector's biggest ever crisis, as stated by the industry association speaking for the sector.

New EU Proposals and Regulations

Through its proposal presented to the European parliament this week, the European Commission additionally suggested cutting the current allowance for tariff-exempt steel and requiring foreign suppliers to disclose the origin of steel production to stop China sneaking products in through third nations.

The European steel industry faced potential collapse – we are protecting it so that investments can be made, decarbonise, and regain competitiveness.

Replacement of Existing System

These measures are intended to supersede a import framework that has been in operation for the last seven years and which is set to expire in 2026 and is now seen as ineffective. Inaction could have been "disastrous" for the industry, a European official said.

Industry Reaction and Warnings

Nevertheless, industry representatives, from the trade association UK Steel, stated EU doubling its tariffs 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 domestic protections to protect" the British steel sector – which is still reeling from a 25% tariff from the US recently – from the risk of millions of tonnes of world steel diverted away from US and European markets.

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

Union and Political Calls

Alasdair McDiarmid, representative at labor union the industry union, 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 nation-specific duty-free quotas, pointing out that the UK was now the European Union's primary trading partner.

Industry Background

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 American market shipments along with high energy costs and low-cost Chinese imports.

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 transport infrastructure to dishwashers and cutlery.

Implementation and Next Steps

The new measures must be agreed by member states and the European parliament, with the EU executive head urging member states and European parliament members to move quickly in support of the initiative.

If the plan is ratified, the European Union will reduce its existing tariff-free allowance by 47% to 18.3 million tons a year, a volume last seen in 2013. It will apply a fifty percent tariff on imports beyond the quota and require countries shipping to the bloc to declare the production origin to avoid bypassing of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or duties because of their strong economic ties in the EEA, 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.

EU needs to act now, and firmly, prior to all lights go out in significant portions of the European steel sector and its value chains.