European Union's Proposal to Align With US Steel Tariffs Spurs 'Survival Risk' to British Steel Industry

EU officials declared they will match Donald Trump's steel tariffs, increasing to double levies on foreign steel to 50% in a move described as "an existential threat" to the industry in the UK.

Major Challenge for UK Steel Exports

Given that eighty percent of British exports destined for the EU, this policy shift represents the British steel sector's most severe challenge, as stated by the lobby group representing the industry.

European Commission Proposals and Regulations

Through its proposal presented to the EU legislature on Tuesday, the EU executive also proposed reducing the current allowance for duty-free imports and obliging international producers to disclose the origin of steel production to stop Chinese producers diverting exports through other countries.

EU steel sector was on the verge of collapse – these measures safeguard it so that it can invest, reduce emissions, 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system that has been functioning for the past seven years and which is due to expire in 2026 and is now considered outdated. To do nothing could have been "catastrophic" for the industry, one EU official stated.

Industry Reaction and Concerns

Nevertheless, industry representatives, head of the industry body UK Steel, stated EU doubling its tariffs would create "the most severe challenge the British steel sector has ever faced".

He called on the government to "acknowledge the urgent need to put in place domestic protections to defend" the British steel sector – which is still reeling from a twenty-five percent duty from Trump recently – from the risk of vast quantities of global steel redirected from American and EU markets.

This flood of imports "might prove fatal for numerous steel companies.

Labor and Political Pressure

Union leaders, assistant general secretary at steelworkers' union the industry union, said the new measures represented "a survival risk" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks urgently with the European Union on nation-specific tariff exemptions, noting that the United Kingdom was now the EU's No 1 trading partner.

Broader Context

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

The steel industry on both sides of the Channel is considered a foundational industry, supplying basic materials in products ranging from building frameworks, wind turbines and railways to household appliances and kitchenware.

Implementation and Next Steps

The new measures must be agreed by EU nations and the EU legislature, with the EU executive head urging member states and European parliament members to move quickly in support of the proposal.

Should approval be granted, the European Union will cut its existing tariff-free allowance by 47% to 18.3m tonnes a year, a level last seen in 2013. It will impose a fifty percent tariff on foreign steel beyond the quota and oblige nations exporting into the bloc to declare the production origin to prevent circumvention of the sanctions.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to import limits or duties because of their close trading relationship in the European Economic Area, the European Union has confirmed.

Alongside the proposal, the EU is seeking a "metals alliance" with the United States to ringfence their respective economies from excess production.

The European Union must take immediate action, and decisively, prior to all lights go out in significant portions of the EU steel industry and its supply networks.