EU's Proposal to Align With Trump's Steel Tariffs Spurs 'Survival Risk' to British Steel Industry

The European Union declared they will match the United States' steel tariffs, effectively doubling levies on foreign steel to fifty percent in a decision condemned as "a critical danger" to the industry in Britain.

Major Challenge for British Steel Industry

Given that 80% of British exports going to the EU, this change represents the British steel sector's most severe crisis, as stated by the industry association representing the sector.

European Commission Measures and Rules

Through its proposal submitted to the EU legislature on Tuesday, the EU executive also proposed reducing the current allowance for tariff-exempt steel and requiring foreign suppliers to disclose where the steel was melted and poured to prevent Chinese producers sneaking products in through other countries.

EU steel sector faced potential collapse – these measures safeguard it so that it can invest, reduce emissions, and become competitive again.

Overhaul of Current Framework

These measures are designed to replace a quota system that has been in operation for the past seven years and which is set to expire in 2026 and is now seen as outdated. To do nothing could have been "fatal" for the sector, one EU official stated.

Industry Reaction and Warnings

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

There were calls for the UK authorities to "acknowledge the critical necessity to put in place its own measures to defend" the UK steel industry – which is affected by a 25% tariff imposed by the US recently – from the risk of millions of tonnes of global steel diverted away from US and European markets.

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

Union and Political Calls

Alasdair McDiarmid, representative at labor union Community, said the new measures represented "a survival risk" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks immediately with the European Union on nation-specific tariff exemptions, noting that the UK was now the European Union's No 1 export market.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for months that their own industry confronts being "eliminated" through the new 50% tariffs on American market shipments along with high energy costs and low-cost Chinese imports.

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

Adoption and Future Actions

The new measures require approval by EU nations and the European parliament, with the EU executive head urging member states and MEPs to move quickly in support of the proposal.

Should approval be granted, the EU will reduce its existing tariff-free allowance by forty-seven percent to 18.3m tonnes a year, a volume last seen in 2013. It will apply a fifty percent duty on foreign steel exceeding the limit and oblige nations exporting into the bloc to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to import limits or duties because of their strong economic ties in the European Economic Area, the European Union has said.

In addition to these measures, the European Union is pursuing a "metals alliance" with the US to ringfence their national industries from overcapacity.

The European Union needs to act now, and decisively, before operations cease in large parts of the European steel sector and its value chains.