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EU officials revealed they will adopt the United States' steel tariffs, effectively doubling taxes on imports to 50% in a move described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for UK Steel Exports

With eighty percent of British exports destined for the European Union, this change represents the UK steel industry's most severe crisis, as stated by the lobby group speaking for the sector.

European Commission Measures and Regulations

Through its proposal submitted to the EU legislature on Tuesday, the EU executive additionally suggested slashing the existing quota for tariff-exempt steel and obliging international producers to declare where the steel was melted and poured to prevent Chinese producers sneaking products in through third nations.

The European steel industry faced potential collapse – these measures safeguard it so that it can invest, decarbonise, and become competitive again.

Overhaul of Existing System

The proposals are designed to supersede a import framework that has been in operation for the last seven years and which is due to expire in 2026 and is now considered not fit for purpose. Inaction could have been "catastrophic" for the sector, a European official stated.

Sector Response and Warnings

Nevertheless, Gareth Stace, from the trade association UK Steel, said EU doubling its tariffs would create "the biggest crisis the British steel sector has encountered".

He called on the government to "acknowledge the urgent need to implement domestic protections to protect" the British steel sector – which is affected by a 25% duty imposed by the US earlier this year – from the risk of millions of tonnes of world steel redirected from American and EU markets.

This flood of imports "could be terminal for many of our remaining steel companies.

Union and Political Pressure

Union leaders, representative at steelworkers' union the industry union, said the new measures posed "an existential threat" to British steel production.

Unions and industry leaders called on the UK government to start negotiations urgently with the European Union on country-specific tariff exemptions, pointing out that the United Kingdom was now the EU's No 1 export market.

Broader Context

Sector representatives in the EU have repeatedly cautioned for several months that the European steel sector faces being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

The steel industry on both sides of the Channel is described as a essential sector, providing basic materials in products ranging from skyscraper structures, renewable energy equipment and transport infrastructure to household appliances and kitchenware.

Implementation and Next Steps

These proposals require approval by member states and the EU legislature, with the EU executive head calling on member states and MEPs to act fast in backing the proposal.

If the plan is ratified, the European Union will reduce its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a volume last seen in 2013. It will apply a 50% duty on imports exceeding the limit and require nations exporting into the EU to declare where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and Global Partnerships

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

Alongside the proposal, the European Union is seeking a "metals alliance" with the US to ringfence their national industries from overcapacity.

EU needs to act now, and firmly, prior to operations cease in large parts of the EU steel industry and its value chains.