EU's Proposal to Match US Steel Tariffs Poses 'Survival Risk' to UK's Steel Sector

The European Union declared they will adopt the United States' import duties on steel, increasing to double taxes on imports to 50% in a decision condemned as "a critical danger" to the sector in the UK.

Unprecedented Crisis for British Steel Exports

With eighty percent of UK steel shipments going to the EU, this policy shift creates the UK steel industry's largest challenge, as stated by the lobby group speaking for the industry.

New EU Measures and Rules

Through its proposal presented to the EU legislature on Tuesday, the EU executive additionally suggested slashing the existing quota for duty-free imports and obliging international producers to state where the steel was melted and poured to stop Chinese producers sneaking products in through other countries.

The European steel industry faced potential collapse – these measures safeguard it so that it can invest, reduce emissions, and regain competitiveness.

Replacement of Existing System

The proposals are designed to supersede a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "catastrophic" for the sector, one EU official said.

Sector Reaction and Warnings

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

He called on the UK authorities to "acknowledge the urgent need to put in place domestic protections to defend" the British steel sector – which is still reeling from a twenty-five percent duty imposed by the US recently – from the risk of vast quantities of world steel diverted away from US and European markets.

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

Union and Government Pressure

Alasdair McDiarmid, assistant general secretary at labor union Community, said the new measures represented "a survival risk" to British steel production.

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

Industry Background

Industry leaders in the EU have repeatedly cautioned for several months that their own industry faces being "wiped out" through the new 50% tariffs on exports to the US combined with high energy costs and low-cost Chinese imports.

The steel industry on in both the UK and EU is considered a foundational industry, providing elemental components in everything from building frameworks, renewable energy equipment and transport infrastructure to dishwashers and cutlery.

Adoption and Next Steps

The new measures require approval by member states and the EU legislature, with the European Commission president urging member states and MEPs to move quickly in backing the initiative.

Should approval be granted, the European Union will cut its current duty-free quota by 47% to 18.3m tonnes a annually, a volume last seen in 2013. It will impose a 50% tariff on foreign steel exceeding the limit and oblige nations exporting into the bloc to state where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties because of their strong economic ties in the EEA, the EU has confirmed.

Alongside the proposal, the European Union is seeking a "steel partnership" with the United States to protect their national industries from excess production.

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