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The European Union have announced plans to match Donald Trump's steel tariffs, effectively doubling taxes on foreign steel to fifty percent in a decision described as "an existential threat" to the sector in the UK.

Unprecedented Crisis for British Steel Exports

Given that 80% of British exports going to the EU, this change creates the UK steel industry's biggest ever crisis, according to the lobby group representing the sector.

New EU Proposals and Regulations

Through its proposal submitted to the European parliament on Tuesday, the EU executive additionally suggested reducing the current allowance for tariff-exempt steel and requiring foreign suppliers to disclose the origin of steel production to prevent Chinese producers diverting exports through other countries.

The European steel industry was on the verge of collapse – we are protecting it so that it can invest, reduce emissions, and regain competitiveness.

Replacement of Current Framework

These measures 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 considered not fit for purpose. To do nothing could have been "disastrous" for the industry, a European official stated.

Sector Response and Concerns

Nevertheless, industry representatives, head of the trade association British Steel, stated EU doubling its tariffs would pose "the biggest crisis the British steel sector has encountered".

There were calls for the UK authorities to "acknowledge the urgent need to implement domestic protections to defend" the UK steel industry – which is affected by a 25% duty imposed by the US earlier this year – from the risk of vast quantities of world steel redirected from American and EU markets.

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

Labor and Government Pressure

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

Unions and industry leaders called on the UK government to start negotiations urgently with the EU on country-specific tariff exemptions, pointing out that the UK was now the EU's No 1 export market.

Industry Background

Industry leaders in the EU have also been warning for months that their own industry confronts being "wiped out" through the new 50% tariffs on American market shipments combined with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is considered a foundational industry, providing basic materials in products ranging from building frameworks, wind turbines and railways to dishwashers and cutlery.

Implementation and Next Steps

These proposals must be agreed by member states and the EU legislature, with the European Commission president urging member states and European parliament members to act fast in support of the initiative.

If the plan is ratified, the European Union will reduce its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a level previously recorded in 2013. It will apply a fifty percent tariff on imports exceeding the limit and oblige countries shipping to the bloc to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

These European nations will not be subject to import limits or tariffs because of their strong economic ties in the European Economic Area, the European Union has confirmed.

In addition to these measures, the European Union is seeking a "steel partnership" with the United States to ringfence their national industries from overcapacity.

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.