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EU officials have announced plans to match Donald Trump's steel tariffs, increasing to double taxes on imports to fifty percent in a move described as "a critical danger" to the sector in the UK.

Unprecedented Crisis for British Steel Exports

Given that 80% of UK steel shipments destined for the European Union, this policy shift creates the British steel sector's most severe challenge, as stated by the lobby group speaking for the sector.

European Commission Proposals and Rules

Through its proposal submitted to the European parliament this week, the EU executive additionally suggested cutting the current allowance for duty-free imports and requiring international producers to state the origin of steel production to stop Chinese producers sneaking products in through other countries.

EU steel sector was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again.

Overhaul of Existing System

These measures are designed 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 not fit for purpose. Inaction could have been "fatal" for the industry, one EU official said.

Sector Reaction and Concerns

However, industry representatives, from the industry body UK Steel, stated EU doubling its tariffs would create "the most severe challenge the UK steel industry has ever faced".

He called on the government to "recognise the urgent need to implement domestic protections 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 diverted away from American and EU markets.

This flood of imports "might prove terminal for numerous steel companies.

Labor and Political Calls

Alasdair McDiarmid, representative at steelworkers' union Community, said the new measures represented "a survival risk" to British steel production.

Labor and business representatives urged the UK government to start negotiations immediately with the European Union on nation-specific duty-free quotas, pointing out that the UK was now the European Union's No 1 export market.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for several months that the European steel sector faces being "eliminated" through the increased duties on American market shipments combined with high energy costs and cheap Chinese competition.

The steel industry on both sides of the Channel is described as a foundational industry, providing elemental components in products ranging from building frameworks, renewable energy equipment and railways to dishwashers and cutlery.

Implementation and Next Steps

The new measures must be agreed by member states and the EU legislature, with the EU executive head urging national governments and MEPs to move quickly in backing the initiative.

If the plan is ratified, the EU will cut its existing tariff-free allowance by forty-seven percent to 18.3 million tons a year, a volume last seen in 2013. It will impose a 50% duty on imports beyond the quota and oblige nations shipping to the EU to declare the production origin to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

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

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

The European Union must take immediate action, and firmly, prior to operations cease in large parts of the European steel sector and its value chains.