European Union's Proposal to Match US Steel Tariffs Poses 'Survival Risk' to British Steel Industry

EU officials revealed plans to mirror the United States' import duties on steel, effectively doubling levies on foreign steel to 50% in a decision described as "a survival risk" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

With eighty percent of British exports going to the European Union, this policy shift poses the British steel sector's biggest ever crisis, as stated by the industry association speaking for the sector.

European Commission Measures and Regulations

Through its proposal presented to the European parliament this week, the EU executive also proposed cutting the current allowance for tariff-exempt steel and requiring foreign suppliers to state where the steel was melted and poured to stop Chinese producers diverting exports through other countries.

EU steel sector was on the verge of collapse – these measures safeguard it so that it can invest, reduce emissions, and become competitive again.

Replacement of Current Framework

These measures are intended to supersede a quota system that has been in operation for the past seven years and which is set to expire in 2026 and is now considered outdated. Inaction could have been "fatal" for the sector, a European official said.

Industry Reaction and Concerns

However, Gareth Stace, from the industry body British Steel, stated EU doubling its tariffs would pose "the most severe challenge the British steel sector has ever faced".

There were calls for the government to "recognise the critical necessity to implement domestic protections to defend" the British steel sector – which is affected by a 25% duty imposed by Trump earlier this year – from the threat of millions of tonnes of world steel diverted away from US and European markets.

This surge in foreign steel "might prove fatal for numerous steel companies.

Labor and Government Pressure

Alasdair McDiarmid, assistant general secretary at steelworkers' union Community, said the proposed changes represented "a survival risk" to UK steel.

Unions and industry leaders called on the UK government to start negotiations immediately with the EU on nation-specific tariff exemptions, noting that the UK was now the EU's primary trading partner.

Industry Background

Industry leaders in the European Union have also been warning for months that their own industry confronts being "wiped out" through the increased duties on American market shipments along with rising energy prices and low-cost Chinese imports.

The steel industry on both sides of the Channel is considered a essential sector, providing basic materials in everything from building frameworks, wind turbines and railways to household appliances and cutlery.

Adoption and Future Actions

The new measures require approval by member states and the European parliament, with the EU executive head urging member states and MEPs to act fast in backing the initiative.

Should approval be granted, the EU will cut its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a level last seen in 2013. It will apply a fifty percent tariff on imports beyond the quota and oblige countries shipping to the bloc to declare the production origin to prevent circumvention of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein 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 seeking a "steel partnership" with the US to protect their respective economies from excess production.

The European Union needs to act now, and decisively, prior to operations cease in significant portions of the European steel sector and its supply networks.