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The European Union have announced they will match the United States' import duties on steel, increasing to double taxes on imports to 50% in a decision described as "an existential threat" to the sector in Britain.

Unprecedented Crisis for British Steel Industry

With 80% of UK steel shipments going to the EU, this change represents the British steel sector's biggest ever crisis, as stated by the lobby group speaking for the industry.

New EU Proposals and Rules

In its plan presented to the European parliament this week, the EU executive also proposed cutting the current allowance for duty-free imports and obliging international producers to disclose where the steel was melted and poured to stop China sneaking products in through other countries.

The European steel industry faced potential collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

The proposals are intended to replace a quota system that has been in operation for the last seven years and which is due to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "catastrophic" for the industry, a European official said.

Sector Response and Concerns

Nevertheless, Gareth Stace, head of the trade association UK Steel, stated EU increasing duties would create "the most severe challenge the UK steel industry has ever faced".

There were calls for the government to "acknowledge the critical necessity to put in place its own measures to defend" the UK steel industry – which is still reeling from a 25% tariff imposed by the US earlier this year – from the threat of vast quantities of global steel redirected from American and EU markets.

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

Labor and Political Calls

Union leaders, representative at steelworkers' union the industry union, stated the new measures posed "an existential threat" to British steel production.

Unions and industry leaders urged Keir Starmer to start negotiations immediately with the EU on country-specific tariff exemptions, pointing out that the UK was now the European Union's primary export market.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for months that their own industry confronts being "eliminated" through the increased duties on exports to the US along with rising energy prices and cheap Chinese competition.

Steel on in both the UK and EU is described as a foundational industry, providing elemental components in products ranging from building frameworks, renewable energy equipment and railways to household appliances and kitchenware.

Implementation and Future Actions

These proposals must be agreed by EU nations and the European parliament, with the EU executive head urging member states and European parliament members to act fast in support of the initiative.

If the plan is ratified, the European Union will cut its current duty-free quota by 47% to 18.3m tonnes a year, a volume last seen in 2013. It will impose a 50% tariff on imports exceeding the limit and oblige nations shipping to the bloc to declare where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and International Cooperation

These European nations will not be subject to import limits or tariffs because of their close trading relationship in the EEA, the European Union has said.

In addition to these measures, the EU is seeking a "steel partnership" with the United States to protect their respective economies from excess production.

The European Union needs to act now, and decisively, prior to all lights go out in significant portions of the European steel sector and its value chains.