European Union's Plan to Align With US Steel Tariffs Spurs 'Survival Risk' to British Steel Sector

EU officials revealed plans to match Donald Trump's import duties on steel, increasing to double taxes on foreign steel to 50% in a move described as "a critical danger" to the industry in the UK.

Unprecedented Crisis for UK Steel Industry

Given that 80% of UK steel shipments destined for the European Union, this policy shift represents the British steel sector's biggest ever challenge, as stated by the lobby group representing the industry.

European Commission Measures and Rules

Through its proposal presented to the EU legislature this week, the EU executive additionally suggested slashing the existing quota for tariff-exempt steel and requiring foreign suppliers to declare 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 become competitive again.

Replacement of Current Framework

The proposals are designed to replace a import framework that has been functioning for the last seven years and which is set to expire in 2026 and is now considered ineffective. Inaction could have been "fatal" for the industry, one EU official stated.

Sector Response and Concerns

Nevertheless, Gareth Stace, from the trade association British Steel, stated EU increasing duties would create "the most severe challenge the UK steel industry has ever faced".

There were calls for the government to "acknowledge the critical necessity to put in place domestic protections to defend" the UK steel industry – which is still reeling from a twenty-five percent duty imposed by Trump earlier this year – from the threat of vast quantities of world steel diverted away from American and EU markets.

This surge in foreign steel "could be terminal for numerous steel companies.

Labor and Political Pressure

Union leaders, representative at labor union the industry union, said the new measures posed "an existential threat" to UK steel.

Unions and industry leaders urged Keir Starmer to start negotiations urgently with the EU on country-specific duty-free quotas, pointing out that the UK was now the EU's No 1 export market.

Industry Background

Sector representatives in the European Union have also been warning for months that their own industry confronts being "eliminated" through the increased duties 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 foundational industry, supplying basic materials in everything from building frameworks, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Future Actions

These proposals must be agreed by member states and the European parliament, with the European Commission president calling on member states and European parliament members to act fast in support of the initiative.

If the plan is ratified, the European Union will cut 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 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 not be subject to import limits or duties due to their strong economic ties in the European Economic Area, the EU has confirmed.

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

EU must take immediate action, and decisively, before operations cease in large parts of the EU steel industry and its value chains.