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EU officials have announced they will match the United States' steel tariffs, increasing to double levies on foreign steel to fifty percent in a decision described as "an existential threat" to the sector in the UK.

Major Challenge for British Steel Exports

With eighty percent of British exports destined for the European Union, this policy shift represents the UK steel industry's biggest ever challenge, as stated by the lobby group representing the sector.

European Commission Proposals and Rules

In its plan submitted to the EU legislature on Tuesday, the European Commission also proposed reducing the existing quota for tariff-exempt steel and obliging foreign suppliers to state where the steel was melted and poured 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, decarbonise, and become competitive again.

Overhaul of Existing System

These measures are intended to replace a quota system that has been functioning for the past seven years and which is due to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "fatal" for the sector, a European official said.

Sector Response and Warnings

Nevertheless, industry representatives, from the trade association UK Steel, said Brussels increasing duties would pose "the most severe challenge the British steel sector has ever faced".

He called on the UK authorities to "acknowledge the urgent need to implement its own measures to defend" the UK steel industry – which is still reeling from a 25% duty from the US recently – from the threat of vast quantities of global steel redirected from American and EU markets.

This flood of imports "might prove terminal for many of our remaining steel companies.

Labor and Political Calls

Alasdair McDiarmid, assistant general secretary at steelworkers' union Community, said the new measures represented "an existential threat" to UK steel.

Labor and business representatives called on Keir Starmer to begin talks immediately with the EU on nation-specific tariff exemptions, pointing out that the UK was now the European Union's primary trading partner.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for months that the European steel sector faces being "wiped out" 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 described as a foundational industry, supplying elemental components in everything from building frameworks, renewable energy equipment and railways to dishwashers and cutlery.

Adoption and Next Steps

These proposals require approval by member states and the EU legislature, with the EU executive head calling on member states and European parliament members to move quickly in backing the initiative.

Should approval be granted, the European Union will cut its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a volume last seen in 2013. It will apply a 50% tariff on imports beyond the quota and require countries shipping to the EU to declare where the steel was melted and poured to prevent circumvention of the measures.

Exemptions and International Cooperation

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

In addition to these measures, the EU is seeking a "steel partnership" with the United States to ringfence their national industries from overcapacity.

EU needs to act now, and decisively, prior to operations cease in large parts of the EU steel industry and its value chains.