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EU officials revealed they will adopt the United States' import duties on steel, increasing to double taxes on foreign steel to fifty percent in a decision described as "an existential threat" to the industry in the UK.

Unprecedented Crisis for UK Steel Industry

Given that 80% of British exports destined for the EU, this policy shift creates the UK steel industry's largest crisis, according to the lobby group speaking for the industry.

New EU Measures and Rules

Through its proposal presented to the European parliament this week, the European Commission also proposed cutting the current allowance for tariff-exempt steel and requiring international producers to state where the steel was melted and poured to prevent China sneaking products in through other countries.

The European steel industry faced potential collapse – we are protecting it so that investments can be made, decarbonise, and become competitive again.

Overhaul of Existing System

The proposals are designed to replace a quota system that has been functioning for the last seven years and which is due to expire in 2026 and is now seen as ineffective. To do nothing could have been "disastrous" for the sector, one EU official said.

Industry Reaction and Warnings

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

There were calls for the UK authorities to "acknowledge the critical necessity to put in place domestic protections to protect" the British steel sector – which is still reeling from a 25% tariff imposed by the US recently – from the threat of vast quantities of global steel diverted away from American and EU markets.

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

Union and Government Calls

Union leaders, assistant general secretary at steelworkers' union Community, stated the proposed changes represented "an existential threat" to British steel production.

Unions and industry leaders urged Keir Starmer to start negotiations urgently with the EU on nation-specific tariff exemptions, pointing out that the UK was now the European Union's No 1 trading partner.

Broader Context

Sector representatives in the European Union have repeatedly cautioned 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.

Steel on both sides of the Channel is described as a foundational industry, providing elemental components in everything from building frameworks, wind turbines and railways to dishwashers and cutlery.

Adoption and Future Actions

These proposals must be agreed by EU nations and the EU legislature, with the European Commission president calling on national governments and European parliament members to act fast in backing the proposal.

Should approval be granted, the EU will reduce its current duty-free quota by 47% to 18.3 million tons a year, a level last seen in 2013. It will impose a 50% duty on foreign steel beyond the quota and require nations exporting into the bloc to declare the production origin to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties because of their close trading relationship in the European Economic Area, the European Union has confirmed.

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

The European Union must take immediate action, and decisively, before all lights go out in large parts of the European steel sector and its supply networks.