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The European Union declared plans to match the United States' steel tariffs, increasing to double taxes on foreign steel to 50% in a move condemned as "an existential threat" to the industry in Britain.

Major Challenge for UK Steel Industry

Given that 80% of UK steel shipments destined for the EU, this change creates the British steel sector's most severe crisis, according to the industry association representing the sector.

European Commission Proposals and Rules

Through its proposal submitted to the EU legislature on Tuesday, the European Commission additionally suggested slashing the current allowance for tariff-exempt steel and requiring foreign suppliers to state where the steel was melted and poured to prevent China diverting exports through third nations.

EU steel sector stood at the brink of failure – we are protecting it so that investments can be made, decarbonise, and become competitive again.

Replacement of Existing System

The proposals are designed 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 seen as not fit for purpose. To do nothing could have been "disastrous" for the industry, one EU official said.

Sector Response and Concerns

Nevertheless, industry representatives, head of the industry body UK Steel, said EU increasing duties would create "the most severe challenge the UK steel industry has ever faced".

He called on the government to "recognise the urgent need to put in place its own measures to defend" the UK steel industry – which is still reeling from a twenty-five percent tariff imposed by the US earlier this year – from the risk of vast quantities of world steel redirected from American and EU markets.

This surge in foreign steel "could be fatal for many of our remaining steel companies.

Union and Government Calls

Alasdair McDiarmid, assistant general secretary at labor union Community, stated the new measures represented "an existential threat" to British steel production.

Labor and business representatives urged Keir Starmer to begin talks urgently with the European Union on country-specific tariff exemptions, pointing out that the United Kingdom was now the European Union's primary export market.

Industry Background

Sector representatives in the EU have also been warning for several months that their own industry confronts being "wiped out" through the new 50% tariffs on American market shipments combined with high energy costs and low-cost Chinese imports.

The steel industry on both sides of the Channel is described as a foundational industry, providing elemental components in products ranging from skyscraper structures, renewable energy equipment and transport infrastructure to household appliances and cutlery.

Adoption and Next Steps

These proposals must be agreed by member states and the European parliament, with the European Commission president urging national governments and European parliament members to act fast in backing the proposal.

If the plan is ratified, the European Union will reduce its current duty-free quota by 47% to 18.3m tonnes a year, a volume last seen in 2013. It will apply a 50% duty on foreign steel exceeding the limit and oblige countries shipping to the bloc to declare the production origin to avoid bypassing of the measures.

Exemptions and International Cooperation

These European nations will be exempt from import limits or duties because of their close trading relationship in the EEA, the EU has said.

In addition to these measures, the EU is pursuing a "steel partnership" with the US to protect their respective economies from overcapacity.

EU must take immediate action, and decisively, prior to operations cease in significant portions of the European steel sector and its value chains.