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The European Union declared plans to match the United States' import duties on steel, effectively doubling levies on imports to 50% in a move described as "a critical danger" to the sector in the UK.

Unprecedented Crisis for UK Steel Exports

Given that eighty percent of British exports destined for the European Union, this change poses the UK steel industry's biggest ever challenge, according to the industry association representing the industry.

New EU Proposals and Regulations

Through its proposal presented to the EU legislature this week, the European Commission additionally suggested slashing the existing quota for tariff-exempt steel and requiring international producers to disclose the origin of steel production to prevent Chinese producers sneaking products in through other countries.

EU steel sector stood at the brink of failure – we are protecting it so that investments can be made, decarbonise, and become competitive again.

Overhaul of Existing System

The proposals are intended 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 not fit for purpose. To do nothing could have been "disastrous" for the sector, one EU official stated.

Industry Reaction and Concerns

Nevertheless, Gareth Stace, head of the trade association British Steel, stated EU increasing duties would pose "the biggest crisis the UK steel industry has ever faced".

There were calls for the government to "recognise the urgent need to implement domestic protections to protect" the British steel sector – which is still reeling from a 25% tariff from the US earlier this year – from the threat of millions of tonnes of world steel diverted away from American and EU markets.

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

Labor and Government Pressure

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

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

Industry Background

Sector representatives in the EU have also been warning for several months that their own industry faces being "eliminated" through the increased duties on American market shipments along with high energy costs and low-cost Chinese imports.

The steel industry on in both the UK and EU is considered a essential sector, supplying basic materials in everything from skyscraper structures, wind turbines and transport infrastructure to household appliances and cutlery.

Implementation and Future Actions

The new measures must be agreed by member states and the EU legislature, with the EU executive head calling on member states and European parliament members to act fast in support of the proposal.

If the plan is ratified, the EU will reduce its current duty-free quota by forty-seven percent to 18.3 million tons a year, a volume last seen in 2013. It will impose a fifty percent duty on imports beyond the quota and require nations shipping to the EU to state where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs because of their strong economic ties in the EEA, the European Union has confirmed.

Alongside the proposal, the European Union is pursuing a "steel partnership" with the US to protect their national industries from excess production.

EU must take immediate action, and firmly, prior to all lights go out in large parts of the European steel sector and its value chains.