The EU has announced its intent of doubling levies on imports to 50% in a move that creates problems for the UK steel industry.
With 80% of British exports going to the EU, the change poses the UK steel industry’s biggest ever crisis, according to the lobby group representing the sector.
In its plan to match Donald Trump’s steel tariffs, presented to the European parliament today, the European Commission also proposed slashing the existing quota for duty-free imports and obliging foreign suppliers to declare where the steel was melted and poured to prevent China sneaking products in through other countries.
Senior officials said that the rules would be an “important stepping stone” to progress negotiations with the US and prove to Trump that the EU had a common foe in Beijing.
The bloc’s Commissioner for industry, Stéphane Séjourné, told an event in Strasbourg that the European steel industry was “on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again.”
The proposals are designed to replace a quota system that has been in operation for the last seven years and which is due to expire in 2026 and is now seen as not fit for purpose.
However, Gareth Stace, the Head of the industry body UK Steel, said that Brussels doubling its tariffs would pose “the biggest crisis the UK steel industry has ever faced.”
He called on the government to “recognise the urgent need to put in place its own measures to defend” the UK steel industry – which is still reeling from a 25% tariff imposed by the US President earlier this year – from the threat of millions of tonnes of world steel diverted away from US and European markets. Stace added that this flood of imports “could be terminal for many of our remaining steel companies.”
Alasdair McDiarmid, the Assistant General Secretary at steelworkers’ union Community, said that the new measures posed “an existential threat” to UK steel.
Unions and industry leaders urged UK Prime Minister, Keir Starmer to start negotiations urgently with the EU on country-specific duty-free quotas, noting that the UK was now the EU’s No 1 export market.
Industry leaders in the EU have also been warning for months that their own industry faces being “wiped out” through the new 50% tariffs on exports to the US along with high energy costs and cheap Chinese competition.
The President of industry group Eurofer, Henrik Adam, noted, “The European Union needs to act now, and decisively, before all lights go out in large parts of the EU steel industry and its value chains.”
UK Seeks Clarity On EU Steel Imports Quota
Meanwhile, the UK Industry Minister, Chris McDonald, said, “We will always defend our critical steel industry, which is why we are pushing the European Commission for urgent clarification of the impact of this move on the UK.”
The Minister underscored the importance of maintaining seamless trade flows between the UK and the EU, especially in light of ongoing global challenges.
McDonald also highlighted the need for cooperation with the UK’s closest allies to address these challenges rather than exacerbating them.
The new measures must be agreed by member states and the European parliament, with the European Commission President, Ursula von der Leyen, urging national governments and Members of the European Parliament to act fast in support of the initiative.
If the plan is ratified, the EU will reduce its current duty-free quota by 47% to 18.3m tonnes a year, a level last seen in 2013.
It will impose a 50% tariff on imports beyond the quota and oblige countries exporting into the bloc to state where the steel was melted and poured to prevent circumvention of the sanctions.
Norway, Iceland and Liechtenstein will not be subject to tariff quotas or duties due to their close trading relationship in the European Economic Area, the EU has said.
Alongside the proposal, the EU is seeking a “metals alliance” with the US to ringfence their respective economies from overcapacity.
