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EU officials declared plans to match Donald Trump's steel tariffs, increasing to double taxes on foreign steel to fifty percent in a move condemned as "an existential threat" to the sector in the UK.

Major Challenge for British Steel Industry

Given that eighty percent of British exports going to the EU, this policy shift represents the UK steel industry's most severe challenge, according to the industry association speaking for the industry.

New EU Proposals and Regulations

Through its proposal presented to the European parliament this week, the EU executive additionally suggested reducing the existing quota for duty-free imports and requiring international producers to disclose where the steel was melted and poured to prevent China sneaking products in through other countries.

The European steel industry stood at the brink of failure – we are protecting it so that investments can be made, reduce emissions, and regain competitiveness.

Replacement of Existing System

The proposals are designed 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 "fatal" for the industry, a European official said.

Industry Response and Warnings

Nevertheless, Gareth Stace, from the trade association British Steel, stated Brussels doubling its tariffs would create "the biggest crisis the British steel sector has encountered".

There were calls for the UK authorities to "acknowledge the urgent need to put in place its own measures to defend" the British steel sector – which is still reeling from a 25% duty from the US recently – from the risk of vast quantities of global steel diverted away from American and EU markets.

This surge in foreign steel "might prove fatal for numerous steel companies.

Labor and Political Pressure

Union leaders, representative at labor union the industry union, stated the new measures posed "a survival risk" to British steel production.

Labor and business representatives urged Keir Starmer to start negotiations urgently with the European Union on country-specific tariff exemptions, noting that the UK was now the European Union's primary trading partner.

Industry Background

Industry leaders in the EU have also been warning for months that the European steel sector confronts being "wiped out" through the new 50% tariffs on exports to the US along with high energy costs and low-cost Chinese imports.

The steel industry on both sides of the Channel is considered a essential sector, providing basic materials in everything from building frameworks, wind turbines and railways to household appliances and cutlery.

Adoption and Future Actions

These proposals require approval by member states and the EU legislature, with the EU executive head calling on member states and MEPs to act fast in support of the initiative.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by forty-seven percent to 18.3 million tons a annually, a volume previously recorded in 2013. It will apply a 50% tariff on imports beyond the quota and require nations exporting into the bloc to declare where the steel was melted and poured to prevent circumvention of the measures.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their close trading relationship in the EEA, the European Union has said.

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

EU needs to act now, and decisively, before operations cease in large parts of the European steel sector and its supply networks.