EU officials declared plans to match the United States' import duties on steel, effectively doubling taxes on foreign steel to 50% in a move described as "a critical danger" to the sector in Britain.
Major Challenge for British Steel Exports
Given that 80% of UK steel shipments going to the European Union, this policy shift represents the British steel sector's biggest ever challenge, as stated by the industry association representing the sector.
New EU Proposals and Regulations
In its plan submitted to the European parliament this week, the European Commission additionally suggested reducing the current allowance for tariff-exempt steel and obliging foreign suppliers to state the origin of steel production to stop China sneaking products in through third nations.
EU steel sector stood at the brink of failure – we are protecting it so that it can invest, decarbonise, and regain competitiveness.
Overhaul of Current Framework
These measures are designed to supersede a quota system that has been in operation for the past seven years and which is due to expire in 2026 and is now seen as ineffective. To do nothing could have been "disastrous" for the industry, a European official said.
Industry Reaction and Concerns
However, industry representatives, from the industry body British Steel, stated EU increasing duties would create "the most severe challenge the British steel sector has encountered".
He called on the government to "recognise the critical necessity to put in place domestic protections to protect" the British steel sector – which is affected by a 25% duty from the US recently – from the risk of vast quantities of world steel diverted away from US and European markets.
This surge in foreign steel "could be terminal for numerous steel companies.
Union and Government Pressure
Alasdair McDiarmid, assistant general secretary at labor union Community, said the proposed changes posed "a survival risk" to UK steel.
Unions and industry leaders called on the UK government to begin talks urgently with the European Union on nation-specific duty-free quotas, pointing out that the UK was now the EU's No 1 trading partner.
Industry Background
Sector representatives in the European Union have also been warning for months that their own industry faces being "eliminated" through the new 50% tariffs on American market shipments along with high energy costs and low-cost Chinese imports.
Steel on in both the UK and EU is considered a foundational industry, providing basic materials in everything from skyscraper structures, renewable energy equipment and transport infrastructure to dishwashers and cutlery.
Adoption and Next Steps
The new measures must be agreed by EU nations and the European parliament, with the EU executive head urging national governments and European parliament members 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 exceeding the limit and oblige nations shipping to the EU to declare the production origin to prevent circumvention of the sanctions.
Exemptions and International Cooperation
Norway, Iceland, and Liechtenstein will be exempt from import limits or duties due to their strong economic ties in the EEA, the European Union has said.
In addition to these measures, the European Union is seeking a "steel partnership" with the US to protect their national industries from excess production.
The European Union must take immediate action, and firmly, before operations cease in large parts of the EU steel industry and its value chains.
