EU's Plan to Match US Steel Tariffs Spurs 'Existential Threat' to British Steel Industry

EU officials revealed they will mirror the United States' steel tariffs, effectively doubling levies on foreign steel to fifty percent in a action described as "a survival risk" to the industry in Britain.

Major Challenge for UK Steel Industry

With 80% of UK steel shipments going to the EU, this change creates the British steel sector's biggest ever challenge, according to the lobby group representing the industry.

European Commission Measures and Regulations

In its plan submitted to the EU legislature on Tuesday, the EU executive also proposed cutting the existing quota for duty-free imports and requiring international producers to declare the origin of steel production to prevent Chinese producers diverting exports through third nations.

EU steel sector faced potential collapse – we are protecting it so that it can invest, 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 due to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "fatal" for the sector, a European official said.

Sector Reaction and Warnings

Nevertheless, Gareth Stace, head of the trade association British Steel, said Brussels increasing duties would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the UK authorities to "acknowledge the urgent need to put in place its own measures to protect" the UK steel industry – which is affected by a 25% tariff imposed by the US recently – from the risk of millions of tonnes of world steel redirected from American and EU markets.

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

Labor and Political Calls

Alasdair McDiarmid, representative at steelworkers' union the industry union, stated the proposed changes posed "an existential threat" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks urgently with the European Union on country-specific duty-free quotas, noting that the United Kingdom was now the European Union's primary export market.

Broader Context

Industry leaders in the EU have repeatedly cautioned for several months that their own industry confronts being "eliminated" through the increased duties on American market shipments combined with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is described as a essential sector, providing elemental components in products ranging from skyscraper structures, wind turbines and railways to dishwashers and kitchenware.

Adoption and Future Actions

The new measures require approval by member states and the EU legislature, with the EU executive head urging national governments and MEPs to move quickly in support of the initiative.

Should approval be granted, 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 50% tariff on foreign steel exceeding the limit and oblige nations shipping to the EU to declare the production origin to prevent circumvention of the sanctions.

Exceptions and International Cooperation

These European nations will not be subject to import limits or duties due to their strong economic ties in the European Economic Area, the European Union has confirmed.

Alongside the proposal, the EU is seeking a "metals alliance" with the US to ringfence their national industries from overcapacity.

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