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The European Union declared plans to adopt Donald Trump's steel tariffs, increasing to double taxes on imports 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 UK steel shipments destined for the European Union, this change poses the UK steel industry's biggest ever crisis, as stated by the lobby group speaking for the sector.

European Commission Measures and Regulations

In its plan presented to the EU legislature this week, the EU executive also proposed slashing the current allowance for tariff-exempt steel and obliging international producers to declare where the steel was melted and poured to stop Chinese producers diverting exports through third nations.

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

Replacement of Current Framework

These measures are intended to replace a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now considered outdated. Inaction could have been "disastrous" for the industry, one EU official said.

Sector Reaction and Concerns

Nevertheless, Gareth Stace, head of the trade association UK Steel, stated Brussels doubling its tariffs would create "the biggest crisis the British steel sector has encountered".

There were calls for the UK authorities to "recognise the critical necessity to put in place its own measures to protect" the UK steel industry – which is affected by a twenty-five percent tariff imposed by the US recently – from the risk of millions of tonnes of world steel redirected from American and EU markets.

This surge in foreign steel "might prove fatal for many of our remaining steel companies.

Union and Government Calls

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

Unions and industry leaders urged Keir Starmer to start negotiations immediately with the EU on country-specific duty-free quotas, pointing out that the United Kingdom was now the European Union's No 1 export market.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for several months that the European steel sector confronts being "wiped out" through the increased duties on exports to the US combined with rising energy prices and low-cost Chinese imports.

Steel on both sides of the Channel is considered a essential sector, providing basic materials in everything from building frameworks, wind turbines and transport infrastructure to dishwashers and cutlery.

Adoption and Future Actions

These proposals require approval by EU nations and the EU legislature, with the European Commission president calling on national governments and MEPs to move quickly in backing the proposal.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by forty-seven percent to 18.3m tonnes a year, a level previously recorded in 2013. It will apply a fifty percent duty on foreign steel exceeding the limit and oblige nations exporting into the EU to declare where the steel was melted and poured to avoid bypassing of the measures.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties because of their close trading relationship in the European Economic Area, the EU has said.

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

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