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The European Union have announced plans to mirror the United States' steel tariffs, increasing to double taxes on foreign steel to fifty percent in a decision condemned as "an existential threat" to the industry in the UK.

Unprecedented Crisis for UK Steel Exports

Given that eighty percent of UK steel shipments destined for the EU, this policy shift represents the British steel sector's most severe crisis, as stated by the industry association representing the industry.

European Commission Proposals and Rules

Through its proposal submitted to the European parliament this week, the European Commission also proposed slashing the existing quota for duty-free imports and requiring foreign suppliers to disclose where the steel was melted and poured to stop Chinese producers diverting exports through other countries.

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

Overhaul of Existing System

These measures are designed to supersede a import framework that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as outdated. To do nothing could have been "disastrous" for the sector, one EU official stated.

Industry Reaction and Concerns

However, industry representatives, head of the trade association British Steel, stated Brussels increasing duties would pose "the most severe challenge the British steel sector has ever faced".

He called on the UK authorities to "recognise the critical necessity to put in place domestic protections to protect" the UK steel industry – which is affected by a 25% duty from Trump recently – from the risk of millions of tonnes of world steel diverted away from US and European markets.

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

Union and Political Pressure

Alasdair McDiarmid, assistant general secretary at labor union the industry union, stated the new measures represented "an existential threat" to UK steel.

Unions and industry leaders urged Keir Starmer to begin talks urgently with the European Union on nation-specific tariff exemptions, pointing out that the United Kingdom was now the European Union's No 1 trading partner.

Industry Background

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

The steel industry on both sides of the Channel is described as a foundational industry, providing basic materials in products ranging from skyscraper structures, renewable energy equipment and transport infrastructure to household appliances and kitchenware.

Adoption and Next Steps

The new measures must be agreed by EU nations and the European parliament, with the European Commission president urging member states and European parliament members to move quickly in support of the initiative.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by 47% to 18.3m tonnes a year, a volume previously recorded in 2013. It will impose a 50% tariff on foreign steel beyond the quota and require nations shipping to the EU to state the production origin to prevent circumvention of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties due to their close trading relationship in the European Economic Area, the European Union has said.

Alongside the proposal, the European Union is pursuing a "steel partnership" with the US to ringfence their respective economies from excess production.

EU must take immediate action, and firmly, before all lights go out in significant portions of the European steel sector and its supply networks.