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The European Union have announced they will mirror the United States' import duties on steel, effectively doubling levies on imports to 50% in a decision condemned as "a critical danger" to the sector in the UK.

Major Challenge for UK Steel Exports

Given that 80% of British exports destined for the European Union, this change creates the UK steel industry's biggest ever challenge, as stated by the industry association speaking for the industry.

New EU Proposals and Rules

Through its proposal presented to the EU legislature on Tuesday, the EU executive also proposed cutting the current allowance for duty-free imports and requiring foreign suppliers to declare where the steel was melted and poured to stop Chinese producers diverting exports through third nations.

The European steel industry faced potential 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 import framework that has been functioning for the last seven years and which is due to expire in 2026 and is now considered outdated. Inaction could have been "catastrophic" for the industry, one EU official said.

Industry Reaction and Warnings

Nevertheless, Gareth Stace, head of the industry body UK Steel, said EU doubling its tariffs would create "the biggest crisis the UK steel industry has encountered".

There were calls for the government to "acknowledge the urgent need to implement its own measures to defend" the UK steel industry – which is affected by a 25% duty imposed by the US recently – from the threat of millions of tonnes of global steel redirected from American and EU markets.

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

Union and Political Calls

Alasdair McDiarmid, assistant general secretary at steelworkers' union the industry union, stated the new measures represented "an existential threat" to British steel production.

Labor and business representatives called on Keir Starmer to start negotiations immediately with the EU on country-specific tariff exemptions, pointing out that the UK was now the European Union's No 1 trading partner.

Broader Context

Industry leaders in the European Union have also been warning for months that their own industry confronts being "eliminated" through the new 50% tariffs on exports to the US combined with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is described as a essential sector, supplying elemental components in products ranging from building frameworks, wind turbines and transport infrastructure to dishwashers and cutlery.

Implementation and Future Actions

The new measures must be agreed by member states and the EU legislature, with the European Commission president urging member states and European parliament members to move quickly in backing 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 volume last seen in 2013. It will apply a 50% tariff on imports exceeding the limit and require nations shipping to the bloc to declare the production origin to avoid bypassing of the measures.

Exemptions and International Cooperation

These European nations will not be subject to tariff quotas or tariffs because of their close trading relationship in the European Economic Area, the EU has confirmed.

Alongside the proposal, the European Union is pursuing a "metals alliance" with the US to protect their respective economies from excess production.

EU needs to act now, and firmly, prior to operations cease in significant portions of the EU steel industry and its supply networks.