EU's Proposal to Align With Trump's Steel Tariffs Poses 'Existential Threat' to British Steel Industry

EU officials revealed plans to adopt the United States' steel tariffs, increasing to double taxes on imports to 50% in a decision described as "a critical danger" to the industry in the UK.

Major Challenge for British Steel Exports

Given that 80% of British exports going to the EU, this policy shift poses the British steel sector's biggest ever crisis, as stated by the industry association speaking for the sector.

New EU Proposals and Rules

In its plan presented to the European parliament this week, the EU executive also proposed slashing the current allowance for tariff-exempt steel and requiring international producers to declare the origin of steel production to stop China diverting exports through other countries.

The European steel industry faced potential collapse – we are protecting it so that it can invest, reduce emissions, and become competitive again.

Replacement of Existing System

The proposals are intended to supersede a import framework that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as ineffective. Inaction could have been "disastrous" for the industry, one EU official stated.

Industry Reaction and Concerns

However, Gareth Stace, head of the industry body British Steel, said EU increasing duties 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 put in place its own measures to defend" the British steel sector – which is affected by a 25% duty imposed by the US earlier this year – from the risk of vast quantities of world steel redirected from American and EU markets.

This surge in foreign steel "could be terminal for many of our remaining steel companies.

Labor and Government Pressure

Alasdair McDiarmid, representative at labor union Community, said the new measures posed "an existential threat" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks immediately with the EU on nation-specific duty-free quotas, noting that the UK was now the European Union's primary export market.

Industry Background

Industry leaders in the EU have repeatedly cautioned for months that the European steel sector faces being "wiped out" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

Steel on both sides of the Channel is considered a essential sector, supplying basic materials in everything from skyscraper structures, renewable energy equipment and railways to household appliances and kitchenware.

Adoption and Next Steps

These proposals require approval by EU nations and the EU legislature, with the EU executive head calling on national governments and European parliament members to move quickly in backing the initiative.

Should approval be granted, the European Union will cut its existing tariff-free allowance by 47% to 18.3m tonnes a year, a volume previously recorded in 2013. It will apply a fifty percent duty on foreign steel beyond the quota and oblige countries exporting into the EU to declare where the steel was melted and poured to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or duties because of their strong economic ties in the EEA, the European Union has said.

Alongside the proposal, the European Union is seeking a "metals alliance" with the US to ringfence their national industries from excess production.

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