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The European Union have announced plans to match the United States' steel tariffs, effectively doubling taxes on imports to 50% in a move condemned as "an existential threat" to the industry in the UK.

Major Challenge for British Steel Industry

With eighty percent of UK steel shipments destined for the European Union, this change represents the UK steel industry's biggest ever crisis, according to the lobby group representing the sector.

New EU Proposals and Regulations

Through its proposal submitted to the EU legislature this week, the European Commission additionally suggested reducing the current allowance for duty-free imports and obliging international producers to disclose where the steel was melted and poured to prevent China diverting exports 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.

Overhaul of Current Framework

These measures are intended 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a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now seen as outdated. Inaction could have been "disastrous" for the industry, one EU official stated.

Industry Reaction and Warnings

However, Gareth Stace, head of the industry body British Steel, stated Brussels doubling its tariffs would pose "the most severe challenge the British steel sector has encountered".

He called on the government to "recognise the urgent need to put in place its own measures to defend" the British steel sector – which is affected by a 25% tariff 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 terminal for numerous steel companies.

Labor and Government Calls

Alasdair McDiarmid, representative at steelworkers' union the industry union, stated 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 EU's No 1 export market.

Industry Background

Sector representatives in the European Union have also been warning for months that the European steel sector confronts being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

Steel on both sides of the Channel is considered a foundational industry, providing basic materials in everything from skyscraper structures, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Future Actions

These proposals must be agreed by EU nations and the European parliament, with the European Commission president calling on national governments and MEPs to move quickly in support of the proposal.

If the plan is ratified, the European Union will reduce its current duty-free quota by 47% to 18.3m tonnes a annually, a level previously recorded in 2013. It will impose a 50% tariff on foreign steel beyond the quota and oblige countries exporting into the bloc to state the production origin to avoid bypassing of the measures.

Exemptions and International Cooperation

These European nations will not be subject to tariff quotas or tariffs due to their close trading relationship in the EEA, the European Union has confirmed.

Alongside the proposal, the European Union is seeking a "metals alliance" with the US to protect their respective economies from excess production.

EU needs to act now, and firmly, prior to operations cease in large parts of the EU steel industry and its value chains.