EU's Plan to Align With US Steel Tariffs Spurs 'Survival Risk' to UK's Steel Sector

EU officials declared plans to adopt the United States' steel tariffs, increasing to double levies on imports to fifty percent in a move described as "a survival risk" to the sector in the UK.

Major Challenge for UK Steel Industry

Given that eighty percent of UK steel shipments going to the EU, this policy shift represents the UK steel industry's biggest ever challenge, as stated by the industry association speaking for the industry.

New EU Proposals and Regulations

In its plan submitted to the European parliament this week, the European Commission additionally suggested cutting the current allowance for tariff-exempt steel and requiring international producers to state where the steel was melted and poured to prevent China sneaking products in through other countries.

EU steel sector was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again.

Overhaul of Current Framework

The proposals are designed to supersede a import framework that has been functioning for the past seven years and which is due to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "catastrophic" for the industry, a European official said.

Sector Response and Concerns

Nevertheless, industry representatives, head of the trade association British Steel, said Brussels increasing duties would pose "the most severe challenge the British steel sector has encountered".

There were calls for the UK authorities to "acknowledge the urgent need to put in place domestic protections to defend" the British steel sector – which is still reeling from a twenty-five percent duty imposed by the US recently – from the risk of millions of tonnes of global steel diverted away from American and EU markets.

This surge in foreign steel "might prove terminal for many of our remaining steel companies.

Labor and Political Pressure

Union leaders, assistant general secretary at steelworkers' union the industry union, stated the proposed changes posed "a survival risk" to British steel production.

Unions and industry leaders urged Keir Starmer to begin talks urgently with the EU on country-specific tariff exemptions, noting that the UK was now the EU's primary export market.

Broader Context

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 combined with high energy costs and cheap Chinese competition.

The steel industry on in both the UK and EU is described as a essential sector, supplying elemental components in products ranging from skyscraper structures, wind turbines and railways to household appliances and cutlery.

Adoption and Next Steps

These proposals require approval by EU nations and the EU legislature, with the European Commission president calling on member states and European parliament members to act fast in support of the proposal.

Should approval be granted, the EU will cut its existing tariff-free allowance by 47% to 18.3 million tons a year, a level previously recorded in 2013. It will apply a fifty percent duty on foreign steel beyond the quota and require countries exporting into the EU to declare the production origin to prevent circumvention of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or duties due to their close trading relationship in the EEA, the European Union has confirmed.

Alongside the proposal, the European Union is seeking a "metals alliance" with the US to ringfence their national industries from overcapacity.

The European Union needs to act now, and decisively, before operations cease in large parts of the European steel sector and its value chains.