European Union's Proposal to Align With Trump's Steel Tariffs Poses 'Existential Threat' to UK's Steel Sector

EU officials revealed plans to match the United States' import duties on steel, effectively doubling levies on imports to fifty percent in a decision described as "a critical danger" to the sector in Britain.

Major Challenge for UK Steel Exports

Given that eighty percent of UK steel shipments going to the European Union, this change creates the British steel sector's largest crisis, according to the industry association representing the industry.

New EU Proposals and Regulations

Through its proposal presented to the European parliament on Tuesday, the European Commission also proposed slashing the current allowance for duty-free imports and obliging foreign suppliers to declare the origin of steel production to prevent Chinese producers diverting exports through other countries.

EU steel sector faced potential collapse – these measures safeguard it so that it can invest, decarbonise, and regain competitiveness.

Overhaul of Current Framework

These measures are intended 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 considered ineffective. Inaction could have been "catastrophic" for the sector, one EU official stated.

Sector Response and Concerns

However, industry representatives, from the industry body UK Steel, said Brussels increasing duties would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the UK authorities to "recognise the critical necessity to put in place its own measures to protect" the British steel sector – which is affected by a twenty-five percent tariff from Trump recently – from the risk of vast quantities of global steel diverted away from American and EU markets.

This surge in foreign steel "could be fatal for numerous steel companies.

Union and Political Pressure

Alasdair McDiarmid, representative at steelworkers' union the industry union, stated the proposed changes posed "an existential threat" to UK steel.

Unions and industry leaders called on the UK government to start negotiations immediately with the EU on nation-specific tariff exemptions, pointing out that the UK was now the European Union's primary trading partner.

Broader Context

Sector representatives in the European Union have also been warning for several months that the European steel sector confronts being "wiped out" through the increased duties on exports to the US along with high energy costs and low-cost Chinese imports.

Steel on in both the UK and EU is considered a foundational industry, providing elemental components in products ranging from skyscraper structures, wind turbines and railways to household appliances and cutlery.

Implementation and Next Steps

The new measures require approval by EU nations and the European parliament, with the European Commission president urging 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 forty-seven percent to 18.3m tonnes a annually, a volume last seen in 2013. It will impose a fifty percent tariff on imports exceeding the limit and require nations exporting into the EU to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or duties due to their strong economic ties in the European Economic Area, the European Union has confirmed.

In addition to these measures, the EU is pursuing a "metals alliance" with the United States to protect their national industries from overcapacity.

The European Union must take immediate action, and decisively, prior to all lights go out in significant portions of the European steel sector and its value chains.