European Union's Plan to Match US Steel Tariffs Poses 'Survival Risk' to British Steel Industry

EU officials have announced they will match Donald Trump's import duties on steel, effectively doubling taxes on imports to 50% in a decision described as "an existential threat" to the industry in the UK.

Major Challenge for British Steel Exports

With eighty percent of UK steel shipments destined for the European Union, this policy shift creates the UK steel industry's biggest ever challenge, as stated by the lobby group representing the sector.

New EU Measures and Regulations

In its plan submitted to the EU legislature this week, the EU executive also proposed slashing the current allowance for duty-free imports and obliging international producers to declare where the steel was melted and poured to stop China sneaking products in through third nations.

EU steel sector faced potential collapse – we are protecting it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

These measures are intended to replace a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "fatal" for the industry, one EU official stated.

Sector Response and Concerns

Nevertheless, industry representatives, head of the trade association British Steel, said EU increasing duties would pose "the most severe challenge the UK steel industry has ever faced".

There were calls for the UK authorities to "acknowledge the critical necessity to put in place its own measures to protect" the UK steel industry – which is affected by a 25% tariff from Trump earlier this year – from the threat of millions of tonnes of global steel diverted away from American and EU markets.

This flood of imports "might prove terminal for many of our remaining steel companies.

Labor and Political Calls

Alasdair McDiarmid, assistant general secretary at labor union the industry union, said the proposed changes represented "an existential threat" to UK steel.

Unions and industry leaders urged Keir Starmer to begin talks immediately with the EU on nation-specific duty-free quotas, noting that the United Kingdom was now the EU's primary export market.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for months that the European steel sector faces being "wiped out" through the increased duties on exports to the US along with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is considered a foundational industry, supplying basic materials in products ranging from building frameworks, wind turbines and transport infrastructure to dishwashers and cutlery.

Implementation and Future Actions

These proposals require approval by member states and the European parliament, with the EU executive head urging member states and MEPs to move quickly in support of the initiative.

If the plan is ratified, the EU will cut 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 tariff on foreign steel beyond the quota and oblige nations shipping to the EU to declare the production origin to prevent circumvention of the measures.

Exemptions and International Cooperation

These European nations will not be subject to tariff quotas or tariffs because of their strong economic ties in the European Economic Area, the EU has confirmed.

In addition to these measures, the European Union is seeking a "steel partnership" with the US to protect their national industries from excess production.

The European Union needs to act now, and firmly, prior to operations cease in significant portions of the EU steel industry and its value chains.