EU's Proposal to Align With US Steel Tariffs Spurs 'Survival Risk' to British Steel Sector

EU officials have announced plans to match the United States' steel tariffs, increasing to double levies on foreign steel to 50% in a decision described as "a critical danger" to the sector in Britain.

Major Challenge for UK Steel Exports

With eighty percent of UK steel shipments destined for the European Union, this policy shift represents the UK steel industry's most severe crisis, as stated by the lobby group representing the industry.

New EU Measures and Regulations

Through its proposal presented to the European parliament on Tuesday, the European Commission also proposed cutting the current allowance for duty-free imports and requiring foreign suppliers to state the origin of steel production to prevent China sneaking products in through other countries.

EU steel sector was on the verge of collapse – we are protecting it so that investments can be made, decarbonise, and regain competitiveness.

Replacement of Current Framework

The proposals 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 considered ineffective. To do nothing could have been "disastrous" for the sector, one EU official stated.

Sector Response and Warnings

However, Gareth Stace, head of the trade association British Steel, said Brussels 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 still reeling from a 25% duty imposed by Trump earlier this year – from the threat of vast quantities of global steel redirected from American and EU markets.

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

Labor and Political Calls

Union leaders, assistant general secretary at labor union Community, stated the new measures posed "a survival risk" to British steel production.

Labor and business representatives urged Keir Starmer to begin talks immediately with the European Union on country-specific tariff exemptions, pointing out 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 the European steel sector confronts being "wiped out" through the new 50% tariffs on exports to the US combined with high energy costs and low-cost Chinese imports.

Steel on both sides of the Channel is considered a essential sector, providing elemental components in everything from building frameworks, renewable energy equipment and transport infrastructure to household appliances and cutlery.

Implementation and Next Steps

These proposals require approval by member states and the European parliament, with the EU executive head calling on national governments and MEPs to act fast in support of the initiative.

Should approval be granted, the EU will cut its current duty-free quota by 47% to 18.3 million tons a year, a level last seen in 2013. It will apply a 50% tariff on imports exceeding the limit and require countries shipping to the EU to declare the production origin to prevent circumvention of the sanctions.

Exemptions and Global Partnerships

These European nations will be exempt from import limits or tariffs because of their strong economic ties in the European Economic Area, the European Union has confirmed.

In addition to these measures, the EU is seeking a "steel partnership" with the United States to ringfence their respective economies from overcapacity.

EU needs to act now, and decisively, before all lights go out in significant portions of the European steel sector and its value chains.