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The European Union have announced they will match Donald Trump's steel tariffs, effectively doubling taxes on imports to 50% in a move condemned as "an existential threat" to the sector in the UK.

Major Challenge for UK Steel Industry

Given that 80% of British exports destined for the EU, this policy shift creates the British steel sector's largest challenge, according to the lobby group representing the sector.

European Commission Measures and Regulations

Through its proposal submitted to the European parliament this week, the European Commission also proposed cutting the current allowance for duty-free imports and requiring foreign suppliers to disclose the origin of steel production to stop Chinese producers sneaking products in through third nations.

The European steel industry was on the verge of collapse – these measures safeguard it so that investments can be made, reduce emissions, and regain competitiveness.

Overhaul of Existing System

These measures are intended to supersede a import framework that has been in operation for the past seven years and which is due to expire in 2026 and is now considered ineffective. To do nothing could have been "catastrophic" for the sector, one EU official stated.

Sector Reaction and Concerns

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

There were calls for the government to "acknowledge the critical necessity to put in place domestic protections to protect" the UK steel industry – which is affected by a twenty-five percent tariff from the US recently – from the risk of vast quantities of world steel diverted away from US and European markets.

This flood of imports "might prove terminal for numerous steel companies.

Labor and Political Calls

Union leaders, assistant general secretary at steelworkers' union Community, said the proposed changes represented "a survival risk" to British steel production.

Unions and industry leaders called on Keir Starmer to start negotiations urgently with the EU on country-specific tariff exemptions, pointing out that the UK was now the European Union's No 1 trading partner.

Broader Context

Sector representatives in the EU have repeatedly cautioned for several months that their own industry faces being "eliminated" through the increased duties on American market shipments combined with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is considered a essential sector, supplying elemental components in everything from building frameworks, renewable energy equipment and transport infrastructure to dishwashers and kitchenware.

Implementation and Future Actions

The new measures require approval by member states and the EU legislature, with the European Commission president calling on member states and MEPs to act fast in support of the initiative.

Should approval be granted, the EU will cut its existing tariff-free allowance by forty-seven percent to 18.3 million tons a year, a level previously recorded in 2013. It will impose a fifty percent tariff on imports beyond the quota and oblige countries exporting into the bloc to state where the steel was melted and poured to prevent circumvention of the sanctions.

Exemptions and Global Partnerships

These European nations will not be subject to tariff quotas or tariffs because of their strong economic ties in the EEA, the EU has said.

In addition to these measures, the European Union is pursuing a "steel partnership" with the US to protect their respective economies from excess production.

EU needs to act now, and firmly, before operations cease in significant portions of the European steel sector and its supply networks.