European Union's Proposal to Align With Trump's Steel Tariffs Spurs 'Survival Risk' to UK's Steel Sector

The European Union have announced they will mirror the United States' import duties on steel, increasing to double levies on imports to 50% in a move described as "a survival risk" to the industry in the UK.

Unprecedented Crisis for UK Steel Industry

Given that eighty percent of British exports destined for the EU, this policy shift creates the UK steel industry's largest crisis, according to the industry association representing the industry.

European Commission Proposals and Rules

In its plan submitted to the European parliament on Tuesday, the EU executive additionally suggested reducing the current allowance for duty-free imports and obliging foreign suppliers to disclose where the steel was melted and poured to stop Chinese producers diverting exports through other countries.

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

Replacement of Current Framework

These measures are intended to replace 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 not fit for purpose. To do nothing could have been "catastrophic" for the industry, a European official said.

Industry Response and Warnings

However, industry representatives, from the trade association UK Steel, stated EU increasing duties would create "the most severe challenge the British steel sector has ever faced".

There were calls for the UK authorities to "acknowledge the urgent need to put in place its own measures to defend" the UK steel industry – which is affected by a 25% duty imposed by the US recently – from the risk of vast quantities of global steel diverted away from American and EU markets.

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

Labor and Political Calls

Alasdair McDiarmid, assistant general secretary at steelworkers' union Community, stated the proposed changes posed "a survival risk" to UK steel.

Unions and industry leaders called on the UK government to begin talks urgently with the European Union on country-specific tariff exemptions, pointing out that the UK was now the European Union's No 1 trading partner.

Broader Context

Sector representatives in the EU have repeatedly cautioned for several months that the European steel sector confronts being "wiped out" through the increased duties on American market shipments along with rising energy prices and low-cost Chinese imports.

Steel on both sides of the Channel is considered a foundational industry, supplying basic materials in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and kitchenware.

Implementation and Next Steps

The new measures must be agreed by EU nations and the EU legislature, with the European Commission president calling on member states and MEPs to act fast in support of the proposal.

If the plan is ratified, the EU will reduce its current duty-free quota by 47% to 18.3 million tons a annually, a volume last seen in 2013. It will apply a fifty percent tariff on foreign steel exceeding the limit and oblige countries shipping to the EU to state where the steel was melted and poured to prevent circumvention of the measures.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs due to their close trading relationship in the European Economic Area, the European Union has confirmed.

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

The European Union needs to act now, and firmly, before all lights go out in significant portions of the European steel sector and its value chains.