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The European Union revealed they will adopt the United States' import duties on steel, effectively doubling taxes on foreign steel to fifty percent in a decision condemned as "an existential threat" to the industry in Britain.

Unprecedented Crisis for UK Steel Exports

With 80% of UK steel shipments going to the EU, this policy shift represents the UK steel industry's biggest ever challenge, according to the industry association speaking for the industry.

European Commission Proposals and Rules

Through its proposal presented to the EU legislature this week, the European Commission also proposed cutting the current allowance for tariff-exempt steel and requiring international producers to state the origin of steel production to prevent Chinese producers sneaking products in through other countries.

The European steel industry was on the verge of collapse – we are protecting it so that investments can be made, reduce emissions, and regain competitiveness.

Overhaul of Current Framework

The proposals are intended to replace a quota system 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 "catastrophic" for the sector, a European official stated.

Industry Response and Warnings

Nevertheless, Gareth Stace, head of the industry body UK Steel, stated EU doubling its tariffs would pose "the most severe challenge the UK steel industry has ever faced".

There were calls for the government to "recognise the critical necessity to put in place its own measures to protect" the UK steel industry – which is still reeling from a 25% tariff imposed by the US earlier this year – from the threat of vast quantities of global steel redirected from American and EU markets.

This surge in foreign steel "could be fatal for numerous steel companies.

Union and Government Pressure

Union leaders, assistant general secretary at labor union the industry union, said the proposed changes represented "an existential threat" to UK steel.

Labor and business representatives called on Keir Starmer to start negotiations immediately with the EU on country-specific duty-free quotas, noting that the United Kingdom was now the EU's primary export market.

Broader Context

Sector representatives in the European Union have also been warning for several months that the European steel sector faces being "wiped out" through the increased duties on exports to the US along with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is described as a essential sector, providing basic materials in products ranging from building frameworks, renewable energy equipment and transport infrastructure to household appliances and cutlery.

Implementation and Future Actions

The new measures require approval by EU nations and the European parliament, with the EU executive head urging national governments and MEPs to act fast in support of 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 last seen in 2013. It will apply a 50% duty on imports exceeding the limit and require countries exporting into the EU to state the production origin to avoid bypassing of the sanctions.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs because of their close trading relationship in the EEA, the European Union has confirmed.

In addition to these measures, the EU is pursuing a "steel partnership" with the United States to protect their respective economies from overcapacity.

EU needs to act now, and firmly, prior to operations cease in significant portions of the European steel sector and its supply networks.