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EU officials declared plans to mirror Donald Trump's steel tariffs, increasing to double levies on foreign steel to 50% in a action condemned as "an existential threat" to the sector in the UK.

Major Challenge for UK Steel Industry

With eighty percent of British exports destined for the European Union, this policy shift creates the British steel sector's biggest ever challenge, as stated by the industry association representing the industry.

New EU Measures and Rules

Through its proposal submitted to the EU legislature this week, the EU executive additionally suggested reducing the current allowance for duty-free imports and requiring foreign suppliers to state the origin of steel production to prevent China diverting exports through other countries.

EU steel sector stood at the brink of failure – we are protecting it so that investments can be made, reduce emissions, and become competitive again.

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 set to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "fatal" for the sector, one EU official stated.

Sector Response and Concerns

Nevertheless, Gareth Stace, head of the trade association UK Steel, said Brussels doubling its tariffs would pose "the biggest crisis the UK steel industry has ever faced".

There were calls for the government to "recognise the urgent need to implement its own measures to protect" the UK steel industry – which is still reeling from a 25% duty from Trump recently – from the threat of millions of tonnes of global steel diverted away from US and European markets.

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

Labor and Political Pressure

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

Unions and industry leaders called on Keir Starmer to start negotiations urgently with the EU on country-specific tariff exemptions, noting that the United Kingdom was now the EU's No 1 export market.

Broader Context

Industry leaders in the EU have repeatedly cautioned for several months that the European steel sector faces being "wiped out" through the new 50% tariffs on American market shipments along with high energy costs and cheap Chinese competition.

Steel on in both the UK and EU is described as a essential sector, providing basic materials in everything from skyscraper structures, wind turbines and railways to household appliances and cutlery.

Adoption and Future Actions

The new measures must be agreed by member states and the European parliament, with the EU executive head calling on member states and MEPs to act fast in backing the proposal.

Should approval be granted, the European Union will reduce its current duty-free quota by forty-seven percent to 18.3 million tons a annually, a volume last seen in 2013. It will apply a 50% tariff on foreign steel exceeding the limit and oblige countries exporting into the EU to declare where the steel was melted and poured to prevent circumvention of the sanctions.

Exceptions and International Cooperation

These European nations will not be subject to import limits or duties due to their strong economic ties in the EEA, the EU has confirmed.

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

The European Union needs to act now, and decisively, prior to operations cease in large parts of the EU steel industry and its value chains.