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The European Union declared they will match Donald Trump's import duties on steel, effectively doubling levies on foreign steel to 50% in a decision condemned as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

With 80% of UK steel shipments going to the EU, this change represents the British steel sector's largest challenge, according to the industry association representing the sector.

European Commission Proposals and Regulations

In its plan presented to the EU legislature this week, the EU executive also proposed cutting the current allowance for tariff-exempt steel and requiring international producers to declare the origin of steel production to stop China diverting exports through other countries.

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

The proposals are designed to supersede a quota system that has been in operation for the last seven years and which is due to expire in 2026 and is now considered outdated. To do nothing could have been "disastrous" for the industry, a European official stated.

Industry Response and Warnings

However, Gareth Stace, head of the industry body British Steel, said Brussels increasing duties would create "the biggest crisis the UK steel industry has encountered".

There were calls for the UK authorities to "recognise the critical necessity to implement its own measures to protect" the British steel sector – which is still reeling from a twenty-five percent duty imposed by the US recently – from the threat of millions of tonnes of world steel redirected from US and European markets.

This surge in foreign steel "could be terminal for many of our remaining steel companies.

Labor and Government Pressure

Alasdair McDiarmid, assistant general secretary at labor union the industry union, said the new measures represented "a survival risk" to British steel production.

Unions and industry leaders urged the UK government to start negotiations immediately with the EU on country-specific duty-free quotas, noting that the UK was now the EU's No 1 trading partner.

Broader Context

Industry leaders in the European Union have also been warning for months that their own industry confronts being "wiped out" through the new 50% tariffs on exports to the US combined with rising energy prices and low-cost Chinese imports.

The steel industry on both sides of the Channel is considered a foundational industry, providing basic materials in products ranging from skyscraper structures, wind turbines and transport infrastructure to household appliances and cutlery.

Implementation and Future Actions

These proposals require approval by EU nations and the European parliament, with the EU executive head calling on member states and MEPs to move quickly in backing 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 year, a level previously recorded in 2013. It will impose a 50% duty on imports beyond the quota and require countries exporting into the bloc to declare where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and Global Partnerships

These European nations will not be subject to tariff quotas or duties due to their strong economic ties in the European Economic Area, the European Union has confirmed.

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

EU needs to act now, and decisively, prior to operations cease in significant portions of the European steel sector and its value chains.