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The European Union revealed plans to mirror Donald Trump's steel tariffs, increasing to double levies on foreign steel to fifty percent in a move described as "a survival risk" to the sector in Britain.

Unprecedented Crisis for British Steel Industry

Given that 80% of UK steel shipments going to the European Union, this policy shift creates the UK steel industry's most severe challenge, as stated by the industry association representing the industry.

European Commission Measures and Rules

Through its proposal submitted to the EU legislature this week, the EU executive also proposed reducing the current allowance for tariff-exempt steel and obliging foreign suppliers to disclose where the steel was melted and poured to prevent Chinese producers sneaking products in through other countries.

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

Overhaul of Current Framework

These measures are designed to supersede a quota system that has been in operation for the last 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 "disastrous" for the sector, one EU official stated.

Industry Response and Warnings

Nevertheless, Gareth Stace, head of the industry body UK Steel, said EU increasing duties would create "the biggest crisis the UK steel industry has ever faced".

There were calls for the government to "acknowledge the urgent need to put in place domestic protections to protect" the UK steel industry – which is still reeling from a 25% tariff imposed by the US earlier this year – from the risk of vast quantities of global steel diverted away from American and EU markets.

This flood of imports "could be fatal for numerous steel companies.

Union and Political Calls

Union leaders, representative at labor union Community, said the new measures posed "a survival risk" to British steel production.

Labor and business representatives called on the UK government to start negotiations immediately with the EU on country-specific duty-free quotas, pointing out that the UK was now the EU's No 1 trading partner.

Industry Background

Sector representatives in the EU have also been warning 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 low-cost Chinese imports.

The steel industry on in both the UK and EU is described as a essential sector, providing basic materials in products ranging from building frameworks, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Future Actions

These proposals must be agreed by member states and the European parliament, with the EU executive head calling on member states and European parliament members to act fast in support of the proposal.

Should approval be granted, the EU will reduce its current duty-free quota by forty-seven percent to 18.3m tonnes a year, a level previously recorded in 2013. It will impose a 50% tariff on foreign steel beyond the quota and oblige countries exporting into the EU to state where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and International Cooperation

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

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

EU must take immediate action, and decisively, prior to all lights go out in large parts of the EU steel industry and its value chains.