European Union's Proposal to Match Trump's Steel Tariffs Poses 'Existential Threat' to British Steel Industry

EU officials have announced plans to adopt Donald Trump's steel tariffs, effectively doubling levies on imports to 50% in a decision described as "a survival risk" to the sector in the UK.

Major Challenge for UK Steel Industry

Given that 80% of UK steel shipments destined for the EU, this policy shift represents 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 additionally suggested cutting the current allowance for duty-free imports and requiring foreign suppliers to state where the steel was melted and poured to prevent Chinese producers diverting exports through other countries.

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

Overhaul of Existing System

The proposals are intended 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 not fit for purpose. To do nothing could have been "fatal" for the sector, a European official stated.

Industry Response and Concerns

Nevertheless, industry representatives, from the industry body UK Steel, stated Brussels increasing duties would create "the biggest crisis the British steel sector has encountered".

He called on the government to "acknowledge the urgent need to implement its own measures to protect" the British steel sector – which is affected by a 25% tariff imposed by Trump recently – from the threat of vast quantities of world steel diverted away from American and EU markets.

This flood of imports "could be terminal for numerous steel companies.

Labor and Political Pressure

Alasdair McDiarmid, assistant general secretary at steelworkers' union the industry union, stated the new measures posed "a survival risk" to British steel production.

Unions and industry leaders called on the UK government to begin talks immediately with the EU on nation-specific duty-free quotas, noting that the United Kingdom was now the European Union's No 1 trading partner.

Broader Context

Sector representatives in the EU have also been warning for several months that the European steel sector faces being "eliminated" through the new 50% tariffs on exports to the US along with rising energy prices and low-cost Chinese imports.

Steel on both sides of the Channel is described as a foundational industry, providing elemental components in everything from skyscraper structures, wind turbines and railways to household appliances and kitchenware.

Implementation and Future Actions

The new measures must be agreed by EU nations and the EU legislature, with the European Commission president calling on national governments and MEPs to act fast in backing the initiative.

If the plan is ratified, the European Union will reduce its existing tariff-free allowance by 47% to 18.3 million tons a annually, a volume previously recorded in 2013. It will impose a 50% duty on foreign steel beyond the quota and require nations exporting into the EU to declare where the steel was melted and poured to prevent circumvention of the sanctions.

Exemptions and Global Partnerships

These European nations will be exempt from tariff quotas or duties due to their strong economic ties in the EEA, the European Union has said.

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

EU needs to act now, and decisively, prior to all lights go out in large parts of the EU steel industry and its value chains.