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

The European Union declared they will mirror Donald Trump's import duties on steel, effectively doubling levies on foreign steel to 50% in a move described as "an existential threat" to the industry in Britain.

Major Challenge for UK Steel Exports

Given that eighty percent of British exports going to the EU, this change represents the UK steel industry's largest challenge, as stated by the industry association speaking for the sector.

European Commission Proposals and Regulations

Through its proposal presented to the EU legislature this week, the European Commission also proposed slashing the current allowance for duty-free imports and obliging foreign suppliers to declare where the steel was melted and poured to stop China diverting exports through third nations.

The European steel industry faced potential collapse – we are protecting it so that investments can be made, decarbonise, and regain competitiveness.

Replacement of Existing System

The proposals are designed to supersede a import framework that has been in operation for the past seven years and which is due to expire in 2026 and is now seen as outdated. To do nothing could have been "disastrous" for the industry, one EU official said.

Industry Response and Concerns

Nevertheless, Gareth Stace, from the industry body British Steel, stated EU doubling its tariffs would create "the biggest crisis the British steel sector has ever faced".

There were calls for the government to "acknowledge the urgent need to implement domestic protections to defend" the UK steel industry – which is affected by a 25% duty imposed by the US recently – from the risk of millions of tonnes of global steel diverted away from American and EU markets.

This surge in foreign steel "could be terminal for many of our remaining steel companies.

Labor and Political Pressure

Alasdair McDiarmid, assistant general secretary at labor union Community, said the proposed changes represented "a survival risk" to UK steel.

Unions and industry leaders urged Keir Starmer to begin talks immediately with the EU on nation-specific tariff exemptions, noting that the UK was now the European Union's primary trading partner.

Broader Context

Industry leaders in the European Union have also been warning for months that the European steel sector confronts being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

Steel on both sides of the Channel is considered a essential sector, supplying elemental components in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and cutlery.

Implementation and Future Actions

These proposals must be agreed by EU nations and the European parliament, with the EU executive head urging national governments and European parliament members to move quickly in backing the proposal.

If the plan is ratified, the European Union will cut its existing tariff-free allowance by 47% to 18.3 million tons a annually, a level previously recorded in 2013. It will apply a 50% tariff on imports beyond the quota and oblige nations shipping to the bloc to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and International Cooperation

These European nations will not be subject to import limits or tariffs because of their close trading relationship in the EEA, the EU has said.

In addition to these measures, the EU is seeking a "metals alliance" with the US to ringfence their respective economies from excess production.

EU needs to act now, and decisively, before operations cease in significant portions of the EU steel industry and its value chains.