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EU officials declared plans to mirror 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 UK Steel Industry

Given that 80% of UK steel shipments going to the European Union, this policy shift represents the British steel sector's largest crisis, according to the lobby group speaking for the industry.

New EU Proposals and Rules

In its plan presented to the EU legislature on Tuesday, the EU executive additionally suggested cutting the existing quota for tariff-exempt steel and obliging international producers to declare where the steel was melted and poured to prevent China sneaking products in through other countries.

The European steel industry faced potential collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

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system that has been functioning for the last seven years and which is due to expire in 2026 and is now considered outdated.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

Sector Response and Concerns

Nevertheless, industry representatives, from the trade association UK Steel, said EU doubling its tariffs would pose "the most severe challenge the UK steel industry has ever faced".

There were calls for the government to "acknowledge the critical necessity to implement domestic protections to protect" the British steel sector – which is still reeling from a twenty-five percent tariff from the US earlier this year – from the threat of vast quantities of global steel redirected from US and European markets.

This surge in foreign steel "could be terminal for numerous steel companies.

Union and Government Pressure

Alasdair McDiarmid, representative at steelworkers' union the industry union, said the proposed changes posed "an existential threat" to British steel production.

Unions and industry leaders called on the UK government to start negotiations urgently with the EU on nation-specific duty-free quotas, pointing out that the UK was now the EU's primary export market.

Broader Context

Industry leaders in the EU have repeatedly cautioned for several months that their own industry faces being "eliminated" through the increased duties 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 essential sector, supplying elemental components in products ranging from building frameworks, wind turbines and railways to household appliances and cutlery.

Adoption and Next Steps

The new measures must be agreed by EU nations and the EU legislature, with the European Commission president calling on national governments and European parliament members to act fast in backing the proposal.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by 47% to 18.3 million tons a year, a volume last seen in 2013. It will apply a 50% tariff on foreign steel exceeding the limit and require nations shipping to the bloc to state the production origin to avoid bypassing of the measures.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or duties because of their strong economic ties in the EEA, the EU has confirmed.

In addition to these measures, the European Union is seeking a "metals alliance" with the US to protect their national industries from overcapacity.

EU needs to act now, and firmly, before all lights go out in large parts of the EU steel industry and its supply networks.