EU's Proposal to Match Trump's Steel Tariffs Spurs 'Existential Threat' to British Steel Industry

EU officials declared they will match Donald Trump's import duties on steel, effectively doubling levies on imports to 50% in a decision described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

Given that eighty percent of British exports destined for the EU, this policy shift creates the British steel sector's biggest ever challenge, according to the industry association representing the sector.

European Commission Measures and Rules

Through its proposal submitted to the European parliament on Tuesday, the European Commission also proposed cutting the existing quota for tariff-exempt steel and requiring foreign suppliers to state where the steel was melted and poured to stop Chinese producers sneaking products in through other countries.

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

Overhaul of Existing System

These measures are designed to supersede a quota system that has been functioning for the past seven years and which is set to expire in 2026 and is now seen as outdated. Inaction could have been "disastrous" for the sector, a European official stated.

Sector Reaction and Concerns

However, Gareth Stace, from the trade association UK Steel, said EU increasing duties would pose "the biggest crisis the British steel sector has ever faced".

He called on the government to "recognise the critical necessity to put in place domestic protections to defend" the British steel sector – which is affected by a 25% duty imposed by Trump recently – from the risk of millions of tonnes of world steel diverted away from US and European markets.

This flood of imports "might prove fatal for many of our remaining steel companies.

Labor and Government Calls

Union leaders, representative at steelworkers' union the industry union, stated the new measures represented "an existential threat" to UK steel.

Unions and industry leaders called on Keir Starmer to begin talks immediately with the EU on country-specific tariff exemptions, pointing out that the United Kingdom was now the European Union's primary trading partner.

Broader Context

Industry leaders in the European Union have repeatedly cautioned for several months that their own industry confronts being "eliminated" through the new 50% tariffs on exports to the US combined with high energy costs and cheap Chinese competition.

The steel industry on both sides of the Channel is described as a foundational industry, supplying elemental components in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and kitchenware.

Adoption and Future Actions

The new measures must be agreed by member states and the European parliament, with the European Commission president calling on member states and MEPs to act fast in backing the proposal.

If the plan is ratified, the EU will reduce its current duty-free quota by forty-seven percent to 18.3m tonnes a year, a volume previously recorded in 2013. It will impose a 50% tariff on foreign steel beyond the quota and oblige countries exporting into the bloc to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs 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 "metals alliance" with the United States to ringfence their respective economies from overcapacity.

EU needs to act now, and decisively, prior to all lights go out in significant portions of the European steel sector and its supply networks.