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The European Union declared they will match Donald Trump's steel tariffs, increasing to double levies on foreign steel to 50% in a action described as "an existential threat" to the industry in Britain.

Major Challenge for British Steel Exports

With eighty percent of UK steel shipments going to the EU, this policy shift creates the British steel sector's largest crisis, as stated by the lobby group speaking for the sector.

New EU Measures and Regulations

In its plan submitted to the EU legislature this week, the European Commission additionally suggested reducing the existing quota for tariff-exempt steel and obliging international producers to state where the steel was melted and poured to stop China diverting exports through other countries.

The European steel industry stood at the brink of failure – we are protecting it so that investments can be made, reduce emissions, and regain competitiveness.

Overhaul of Current Framework

The proposals are designed to supersede a quota system that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "catastrophic" for the sector, a European official stated.

Sector Reaction and Warnings

Nevertheless, Gareth Stace, from the industry body British Steel, stated EU increasing duties would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the UK authorities to "acknowledge the urgent need to implement domestic protections to defend" the UK steel industry – which is still reeling from a 25% duty imposed by the US recently – from the risk of millions of tonnes of world steel diverted away from American and EU markets.

This flood of imports "could be terminal for many of our remaining steel companies.

Union and Political Pressure

Alasdair McDiarmid, assistant general secretary at steelworkers' union Community, stated the new measures represented "a survival risk" to UK steel.

Labor and business representatives called on the UK government to start negotiations urgently with the European Union on nation-specific duty-free quotas, pointing out that the UK was now the European Union's No 1 trading partner.

Industry Background

Sector representatives in the European Union have also been warning for several months that the European steel sector confronts being "eliminated" through the increased duties on exports to the US along with high energy costs and cheap Chinese competition.

The steel industry on both sides of the Channel is described as a essential sector, providing basic materials in products ranging from skyscraper structures, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Future Actions

These proposals require approval by member states and the European parliament, with the European Commission president urging member states and European parliament members to act fast in backing the initiative.

Should approval be granted, the EU will reduce its current duty-free quota by 47% to 18.3m tonnes a year, a volume last seen in 2013. It will impose a 50% duty on foreign steel beyond the quota and require nations exporting into the EU to state where the steel was melted and poured to prevent circumvention of the sanctions.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties because of their close trading relationship in the EEA, the EU has said.

Alongside the proposal, the European Union is pursuing a "steel partnership" with the United States to protect their national industries from excess production.

The European Union needs to act now, and firmly, before all lights go out in large parts of the EU steel industry and its value chains.