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The European Union declared they will adopt the United States' steel tariffs, increasing to double taxes on foreign steel to fifty percent in a move condemned as "an existential threat" to the industry in Britain.

Major Challenge for British Steel Industry

With eighty percent of UK steel shipments destined for the EU, this policy shift poses the British steel sector's most severe challenge, as stated by the industry association representing the industry.

European Commission Measures and Regulations

In its plan presented to the European parliament on Tuesday, the EU executive also proposed slashing the existing quota for tariff-exempt steel and obliging foreign suppliers to state where the steel was melted and poured to prevent Chinese producers sneaking products in through third nations.

The European steel industry was on the verge of collapse – these measures safeguard it so that it can invest, reduce emissions, and become competitive again.

Replacement of Current Framework

These measures are intended to replace a quota system that has been in operation for the past seven years and which is set to expire in 2026 and is now considered not fit for purpose. Inaction could have been "fatal" for the sector, a European official stated.

Sector Response and Warnings

Nevertheless, industry representatives, from the industry body UK Steel, stated Brussels doubling its tariffs would pose "the most severe challenge the UK steel industry has encountered".

There were calls for the UK authorities to "acknowledge the critical necessity to implement domestic protections to protect" the British steel sector – which is affected by a 25% tariff imposed by the US recently – from the threat of millions of tonnes of world steel diverted away from US and European markets.

This flood of imports "might prove fatal for many of our remaining steel companies.

Union and Political Pressure

Union leaders, representative at labor union the industry union, stated the proposed changes posed "an existential threat" to British steel production.

Unions and industry leaders urged Keir Starmer to start negotiations immediately with the European Union on country-specific tariff exemptions, pointing out that the UK was now the European Union's primary trading partner.

Broader Context

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

Steel on both sides of the Channel is considered a foundational industry, providing elemental components in products ranging from building frameworks, wind turbines and transport infrastructure to household appliances and kitchenware.

Implementation and Future Actions

These proposals require approval by member states and the European parliament, with the EU executive head calling on member states and European parliament members to move quickly in backing the initiative.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by 47% to 18.3 million tons a year, a level previously recorded in 2013. It will apply a fifty percent duty on foreign steel beyond the quota and require countries exporting into the bloc to declare the production origin to avoid bypassing of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties due to their close trading relationship in the European Economic Area, the European Union has said.

Alongside the proposal, the EU is pursuing a "metals alliance" with the US to ringfence their national industries from overcapacity.

EU needs to act now, and decisively, prior to all lights go out in significant portions of the EU steel industry and its value chains.