European Union's Plan to Align With US Steel Tariffs Poses 'Survival Risk' to British Steel Sector

The European Union declared plans to mirror the United States' steel tariffs, increasing to double taxes on foreign steel to fifty percent in a action described as "a survival risk" to the industry in the UK.

Major Challenge for UK Steel Industry

Given that 80% of British exports going to the EU, this policy shift poses the British steel sector's largest crisis, as stated by the lobby group speaking for the industry.

European Commission Measures and Regulations

In its plan submitted to the EU legislature on Tuesday, the EU executive also proposed reducing the existing quota for duty-free imports and obliging foreign suppliers to declare where the steel was melted and poured to stop China sneaking products in through third nations.

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

Replacement of Existing System

The proposals are designed to supersede a quota system that has been in operation for the past seven years and which is set to expire in 2026 and is now considered ineffective. Inaction could have been "fatal" for the industry, one EU official stated.

Industry Reaction and Warnings

However, Gareth Stace, from the industry body UK Steel, said Brussels doubling its tariffs would create "the most severe challenge the UK steel industry has encountered".

There were calls for the government to "recognise 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 earlier this year – from the threat of millions of tonnes of global steel diverted away from American and EU markets.

This flood of imports "might prove fatal for many of our remaining steel companies.

Union and Government Pressure

Alasdair McDiarmid, representative at labor union the industry union, said the proposed changes posed "a survival risk" to UK steel.

Labor and business representatives called on the UK government to start negotiations urgently with the EU on nation-specific tariff exemptions, noting that the United Kingdom was now the European Union's No 1 export market.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for months that their own industry confronts being "wiped out" through the new 50% tariffs on American market shipments along with high energy costs and cheap Chinese competition.

The steel industry on both sides of the Channel is considered a foundational industry, supplying elemental components in products ranging from skyscraper structures, wind turbines and railways to dishwashers and cutlery.

Implementation and Future Actions

The new measures require approval by EU nations and the EU legislature, with the EU executive head calling on member states and MEPs to move quickly in backing the proposal.

Should approval be granted, the European Union will cut its current duty-free quota by 47% to 18.3 million tons a annually, a level previously recorded in 2013. It will impose a fifty percent duty on imports beyond the quota and oblige countries exporting into the EU to state where the steel was melted and poured to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to import limits or tariffs because of their strong economic ties in the EEA, the EU has said.

Alongside the proposal, the EU is pursuing a "metals alliance" with the US to protect their respective economies from excess production.

EU must take immediate action, and firmly, before operations cease in significant portions of the European steel sector and its supply networks.