🔗 Share this article

The European Union revealed plans to match the United States' import duties on steel, effectively doubling levies on foreign steel to 50% in a action described as "a critical danger" to the sector in the UK.

Unprecedented Crisis for UK Steel Exports

With eighty percent of British exports going to the EU, this change creates the British steel sector's biggest ever challenge, according to the industry association representing the industry.

European Commission Proposals and Regulations

Through its proposal presented to the EU legislature on Tuesday, the European Commission additionally suggested slashing the existing quota for duty-free imports and requiring international producers to state where the steel was melted and poured to stop China sneaking products in through third nations.

EU steel sector was on the verge of collapse – these measures safeguard it so that investments can be made, decarbonise, and become competitive again.

Replacement of Current Framework

The proposals are designed to supersede a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "catastrophic" for the sector, one EU official stated.

Sector Reaction and Concerns

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

There were calls for the government to "recognise the critical necessity to implement domestic protections to protect" the UK steel industry – which is affected by a 25% tariff imposed by the US earlier this year – from the risk of millions of tonnes of world steel redirected from American and EU markets.

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

Union and Political Pressure

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

Labor and business representatives called on the UK government to begin talks urgently with the European Union on nation-specific duty-free quotas, pointing out that the United Kingdom was now the European Union's primary trading partner.

Industry Background

Industry leaders in the European Union have also been warning for several months that the European steel sector faces being "wiped out" through the increased duties on exports to the US along with high energy costs and low-cost Chinese imports.

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

Adoption and Next Steps

The new measures require approval by EU nations and the EU legislature, with the European Commission president urging national governments and European parliament members to act fast in support of the proposal.

If the plan is ratified, the EU will cut its current duty-free quota by forty-seven percent to 18.3m tonnes a annually, a volume previously recorded in 2013. It will apply a fifty percent tariff on foreign steel beyond the quota and oblige countries shipping to the bloc to state where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

These European nations will be exempt from tariff quotas or duties because of their strong economic ties in the European Economic Area, the EU has said.

Alongside the proposal, the EU is pursuing a "metals alliance" with the United States to protect their respective economies from excess production.

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