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The European Union have announced plans to adopt Donald Trump's steel tariffs, effectively doubling taxes on foreign steel to 50% in a move condemned as "an existential threat" to the industry in Britain.

Major Challenge for UK Steel Industry

Given that 80% of British exports going to the European Union, this change represents the British steel sector's biggest ever crisis, according to the lobby group speaking for the sector.

European Commission Proposals and Regulations

Through its proposal presented to the EU legislature on Tuesday, the European Commission also proposed cutting the current allowance for duty-free imports and requiring foreign suppliers to state the origin of steel production to stop China diverting exports through other countries.

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

Overhaul of Current Framework

The proposals are designed to supersede a import framework that has been in operation for the last seven years and which is set to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "fatal" for the sector, one EU official stated.

Sector Reaction and Warnings

However, Gareth Stace, from the industry body UK Steel, said EU increasing duties would pose "the biggest crisis the UK steel industry has ever faced".

There were calls for the UK authorities to "recognise the critical necessity to put in place domestic protections to protect" the UK steel industry – which is affected by a 25% duty from Trump recently – from the threat of millions of tonnes of world steel diverted away from American and EU markets.

This surge in foreign steel "could be terminal for many of our remaining steel companies.

Labor and Government Calls

Alasdair McDiarmid, assistant general secretary at labor union Community, said the new measures posed "an existential threat" to British steel production.

Labor and business representatives called on the UK government to begin talks urgently with the European Union on nation-specific duty-free quotas, pointing out that the UK was now the EU's No 1 trading partner.

Industry Background

Industry leaders in the EU have also been warning for months that their own industry faces being "eliminated" through the new 50% tariffs on American market shipments along with high energy costs and low-cost Chinese imports.

The steel industry on in both the UK and EU is considered a foundational industry, providing basic materials in everything from building frameworks, wind turbines and railways to dishwashers and kitchenware.

Implementation and Next Steps

These proposals must be agreed by member states and the EU legislature, with the EU executive head calling on national governments and MEPs to act fast in support of the proposal.

Should approval be granted, the EU will cut its current duty-free quota by forty-seven percent to 18.3 million tons a annually, a level last seen in 2013. It will apply a fifty percent tariff on foreign steel beyond the quota and oblige countries exporting into the EU to declare where the steel was melted and poured to prevent circumvention of the measures.

Exemptions and International Cooperation

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 "steel partnership" with the United States to ringfence their national industries from excess production.

The European Union needs to act now, and firmly, before all lights go out in significant portions of the European steel sector and its supply networks.