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The European Union have announced plans to match the United States' import duties on steel, increasing to double taxes on imports to fifty percent in a decision condemned as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

With 80% of British exports destined for the European Union, this policy shift represents the UK steel industry's largest crisis, according to the lobby group representing the sector.

European Commission Proposals and Regulations

Through its proposal presented to the European parliament this week, the European Commission also proposed reducing the current allowance for duty-free imports and obliging international producers to disclose the origin of steel production to prevent China sneaking products in through third nations.

The European steel industry faced potential collapse – we are protecting it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

The proposals are intended to supersede a quota system that has been in operation for the last seven years and which is set to expire in 2026 and is now considered not fit for purpose. Inaction could have been "catastrophic" for the industry, one EU official stated.

Sector Response and Warnings

However, Gareth Stace, from the trade association British Steel, said EU doubling its tariffs would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the government to "acknowledge the critical necessity to put in place domestic protections to defend" the British steel sector – which is affected by a 25% duty imposed by the US earlier this year – from the risk of millions of tonnes of world steel redirected from US and European markets.

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

Labor and Political Calls

Union leaders, assistant general secretary at steelworkers' union the industry union, stated the new measures posed "a survival risk" to British steel production.

Labor and business representatives called on Keir Starmer to begin talks immediately with the European Union on nation-specific tariff exemptions, noting that the UK was now the European Union's primary export market.

Industry Background

Sector representatives in the European Union have repeatedly cautioned for months that their own industry confronts being "wiped out" through the increased duties on American market shipments combined with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is described as a foundational industry, supplying basic materials in products ranging from skyscraper structures, wind turbines and railways to household appliances and kitchenware.

Implementation and Future Actions

The new measures require approval by member states and the European parliament, with the European Commission president calling on national governments and MEPs to act fast in support of the proposal.

If the plan is ratified, the European Union will cut its current duty-free quota by 47% to 18.3 million tons a year, a level previously recorded in 2013. It will impose a 50% duty on imports exceeding the limit and require countries exporting into the bloc to declare the production origin to prevent circumvention of the measures.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or duties because of their close trading relationship in the EEA, the EU has confirmed.

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

EU needs to act now, and decisively, prior to all lights go out in significant portions of the EU steel industry and its value chains.