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The European Union have announced they will match the United States' steel tariffs, increasing to double levies on foreign steel to 50% in a action described as "a survival risk" to the sector in the UK.

Unprecedented Crisis for UK Steel Industry

With 80% of British exports destined for the European Union, this policy shift poses the British steel sector's most severe challenge, as stated by the lobby group speaking for the sector.

European Commission Measures and Regulations

In its plan submitted to the EU legislature on Tuesday, the European Commission also proposed cutting the existing quota for duty-free imports and obliging foreign suppliers to disclose the origin of steel production to prevent Chinese producers sneaking products in through third nations.

The European steel industry was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and regain competitiveness.

Overhaul of Existing System

The proposals are designed to replace a import framework that has been functioning for the last seven years and which is set to expire in 2026 and is now considered outdated. To do nothing could have been "disastrous" for the sector, a European official stated.

Industry Response and Warnings

Nevertheless, industry representatives, from the industry body UK Steel, said EU increasing duties would pose "the biggest crisis the UK steel industry has encountered".

He called on the UK authorities to "acknowledge the critical necessity to implement domestic protections to defend" the British steel sector – which is affected by a twenty-five percent tariff from the US earlier this year – from the risk of vast quantities of world steel diverted away from US and European markets.

This surge in foreign steel "might prove fatal for many of our remaining steel companies.

Union and Political Pressure

Union leaders, assistant general secretary at steelworkers' union Community, stated the proposed changes represented "an existential threat" to British steel production.

Labor and business representatives urged Keir Starmer to begin talks urgently with the European Union on nation-specific duty-free quotas, noting that the United Kingdom was now the EU's No 1 export market.

Broader Context

Sector representatives in the European Union have also been warning for several months that their own industry faces being "eliminated" through the increased duties on American market shipments combined with rising energy prices and cheap Chinese competition.

The steel industry on in both the UK and EU is described as a essential sector, providing elemental components in everything from building frameworks, wind turbines and transport infrastructure to household appliances and cutlery.

Adoption and Future Actions

These proposals require approval by EU nations and the European parliament, with the European Commission president calling on national governments 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 18.3 million tons a annually, a volume previously recorded in 2013. It will apply a fifty percent duty on foreign steel exceeding the limit and require countries shipping to the bloc to state the production origin to prevent circumvention of the measures.

Exceptions and Global Partnerships

These European nations will be exempt from import limits or duties because of their close trading relationship in the EEA, the EU has confirmed.

In addition to these measures, the EU is seeking a "steel partnership" with the US to ringfence their national industries from overcapacity.

EU must take immediate action, and firmly, prior to all lights go out in large parts of the EU steel industry and its value chains.