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The European Union declared plans to match Donald Trump's steel tariffs, effectively doubling taxes on imports to fifty percent in a action described as "an existential threat" to the sector in Britain.

Major Challenge for UK Steel Exports

Given that 80% of UK steel shipments destined for the EU, this policy shift creates the UK steel industry's biggest ever challenge, as stated by the industry association representing the industry.

New EU Proposals and Regulations

In its plan submitted to the European parliament this week, the European Commission also proposed reducing the existing quota for tariff-exempt steel and obliging international producers to state the origin of steel production to prevent China diverting exports through third nations.

EU steel sector stood at the brink of failure – we are protecting it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

These measures are intended to replace a quota system that has been functioning for the last seven years and which is due to expire in 2026 and is now seen as outdated. Inaction could have been "disastrous" for the sector, a European official said.

Industry Reaction and Warnings

However, Gareth Stace, head of the industry body British Steel, said EU increasing duties would create "the most severe challenge the British steel sector has encountered".

He called on the UK authorities to "acknowledge the urgent need to implement its own measures to protect" the UK steel industry – which is affected by a 25% tariff from Trump recently – from the risk of millions of tonnes of world steel diverted away from American and EU markets.

This surge in foreign steel "might prove fatal for numerous steel companies.

Labor and Political Pressure

Union leaders, representative at steelworkers' union the industry union, said the proposed changes posed "a survival risk" to UK steel.

Labor and business representatives called on Keir Starmer to begin talks immediately with the European Union on country-specific duty-free quotas, noting that the UK was now the European Union's primary trading partner.

Broader Context

Industry leaders in the European Union 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.

Steel on both sides of the Channel is described as a foundational industry, supplying basic materials in products ranging from skyscraper structures, wind turbines and railways to dishwashers and cutlery.

Implementation and Future Actions

These proposals require approval by EU nations and the EU legislature, with the EU executive head urging member states and MEPs to move quickly in support of the initiative.

Should approval be granted, the European Union will cut its current duty-free quota by 47% to 18.3m tonnes a annually, a level previously recorded in 2013. It will impose a fifty percent duty on imports beyond the quota and require nations shipping to the bloc to declare where the steel was melted and poured to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs because of their close trading relationship in the European Economic Area, the European Union has confirmed.

Alongside the proposal, the EU is pursuing a "metals alliance" with the United States to ringfence their respective economies from excess production.

EU needs to act now, and decisively, before all lights go out in significant portions of the EU steel industry and its supply networks.