EU's Plan to Align With Trump's Steel Tariffs Spurs 'Existential Threat' to UK's Steel Sector

The European Union declared plans to adopt Donald Trump's steel tariffs, effectively doubling levies on imports to 50% in a action described as "an existential threat" to the industry in the UK.

Unprecedented Crisis for UK Steel Exports

Given that 80% of British exports destined for the EU, this policy shift creates the UK steel industry's most severe crisis, as stated by the lobby group representing the industry.

New EU Measures and Regulations

In its plan submitted to the European parliament on Tuesday, the EU executive additionally suggested reducing the current allowance for tariff-exempt steel and obliging foreign suppliers to disclose where the steel was melted and poured to stop Chinese producers sneaking products in through other countries.

EU steel sector faced potential collapse – these measures safeguard it so that investments can be made, reduce emissions, and regain competitiveness.

Overhaul of Existing System

These measures are designed to replace a quota system that has been functioning for the last seven years and which is due to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "catastrophic" for the industry, one EU official said.

Sector Reaction and Concerns

However, industry representatives, from the industry body British Steel, said EU increasing duties would pose "the most severe challenge the British steel sector has encountered".

He called on the UK authorities to "recognise the urgent need to implement its own measures to protect" the UK steel industry – which is still reeling from a twenty-five percent tariff from Trump earlier this year – from the threat of vast quantities of world steel diverted away from American and EU markets.

This surge in foreign steel "could be terminal for many of our remaining steel companies.

Labor and Government Pressure

Alasdair McDiarmid, assistant general secretary at steelworkers' union the industry union, stated the proposed changes posed "a survival risk" to UK steel.

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

Industry Background

Industry leaders in the European Union have also been warning for months that the European steel sector faces being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

The steel industry on in both the UK and EU is considered a essential sector, supplying basic materials in everything from building frameworks, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Future Actions

The new measures require approval by member states and the European parliament, with the European Commission president calling on member states and MEPs to act fast in backing the initiative.

If the plan is ratified, the European Union will cut its existing tariff-free allowance by 47% to 18.3 million tons a year, a level last seen in 2013. It will apply a fifty percent duty on foreign steel beyond the quota and require nations exporting into the bloc to declare where the steel was melted and poured to prevent circumvention of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to import limits or tariffs because of their close trading relationship in the EEA, the EU has said.

Alongside the proposal, the EU is pursuing a "steel partnership" with the United States to ringfence their respective economies from overcapacity.

EU needs to act now, and firmly, prior to operations cease in large parts of the European steel sector and its value chains.