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EU officials have announced plans to match Donald Trump's import duties on steel, increasing to double levies on imports to 50% in a move described as "an existential threat" to the sector in Britain.

Major Challenge for UK Steel Exports

Given that 80% of UK steel shipments destined for the EU, this policy shift poses the UK steel industry's largest challenge, according to the lobby group representing the industry.

European Commission Proposals and Regulations

In its plan presented to the European parliament this week, the EU executive also proposed reducing the current allowance for duty-free imports and requiring foreign suppliers to disclose the origin of steel production to prevent Chinese producers diverting exports through third nations.

EU steel sector faced potential collapse – we are protecting it so that it can invest, reduce emissions, and regain competitiveness.

Overhaul of Current Framework

These measures are designed to replace 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 ineffective. Inaction could have been "fatal" for the sector, a European official said.

Industry Reaction and Concerns

Nevertheless, Gareth Stace, head of the trade association British Steel, said EU increasing duties would create "the most severe challenge the British steel sector has encountered".

He called on the UK authorities to "recognise the urgent need to put in place domestic protections to defend" the British steel sector – which is affected by a 25% tariff from the US earlier this year – from the risk of vast quantities of global steel diverted away from US and European markets.

This flood of imports "might prove terminal for numerous steel companies.

Union and Political Calls

Alasdair McDiarmid, representative at labor union the industry union, said the new measures posed "an existential threat" to UK steel.

Labor and business representatives called on Keir Starmer to begin talks urgently with the European Union on country-specific duty-free quotas, noting that the United Kingdom was now the EU's No 1 trading partner.

Industry Background

Industry leaders in the EU have also been warning for months that their own industry faces being "wiped out" through the new 50% tariffs on American market shipments combined with rising energy prices and low-cost Chinese imports.

Steel on both sides of the Channel is considered a foundational industry, supplying basic materials in everything from skyscraper structures, wind turbines and railways to household appliances and cutlery.

Adoption and Next Steps

The new measures must be agreed by member states and the EU legislature, with the European Commission president urging national governments and MEPs to move quickly in support of 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 year, a level last seen in 2013. It will apply a 50% duty on imports exceeding the limit and require countries shipping to the EU to state where the steel was melted and poured to avoid bypassing of the measures.

Exceptions and Global Partnerships

These European nations will not be subject to tariff quotas or duties because of their strong economic ties in the European Economic Area, the EU has confirmed.

Alongside the proposal, the European Union is seeking a "steel partnership" with the United States to protect their respective economies from overcapacity.

The European Union needs to act now, and firmly, before all lights go out in large parts of the European steel sector and its supply networks.