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The European Union revealed they will match the United States' steel tariffs, effectively doubling taxes on foreign steel to fifty percent in a action described as "a critical danger" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

Given that 80% of UK steel shipments going to the EU, this policy shift creates the British steel sector's largest crisis, as stated by the industry association speaking for the sector.

European Commission Measures and Regulations

Through its proposal submitted to the European parliament this week, the EU executive also proposed slashing the existing quota for tariff-exempt steel and obliging international producers to declare the origin of steel production to stop Chinese producers diverting exports through other countries.

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

Replacement of Existing System

These measures are intended to supersede a import framework that has been functioning for the last seven years and which is due to expire in 2026 and is now considered not fit for purpose. Inaction could have been "catastrophic" for the sector, one EU official said.

Sector Reaction and Concerns

Nevertheless, industry representatives, from the trade association UK Steel, stated EU doubling its tariffs would pose "the biggest crisis the UK steel industry has ever faced".

He called on the government to "recognise the critical necessity to implement domestic protections to defend" the British steel sector – which is still reeling from a 25% duty imposed by the US earlier this year – from the threat of vast quantities of world steel redirected from American and EU markets.

This flood of imports "could be terminal for numerous steel companies.

Union and Government Pressure

Union leaders, assistant general secretary at labor union Community, said the proposed changes represented "an existential threat" to UK steel.

Labor and business representatives 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 export market.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for several months that the European steel sector confronts being "eliminated" through the new 50% tariffs on exports to the US along with rising energy prices and cheap Chinese competition.

The steel industry on in both the UK and EU is described as a essential sector, supplying elemental components in products ranging from building frameworks, wind turbines and transport infrastructure to household appliances and kitchenware.

Adoption and Next Steps

These proposals require approval by EU nations and the EU legislature, with the European Commission president calling on national governments and European parliament members to act fast in backing the initiative.

Should approval be granted, the EU will reduce its current duty-free quota by 47% to 18.3m tonnes a year, a level last seen in 2013. It will impose a fifty percent duty on foreign steel exceeding the limit and require nations exporting into the EU to state where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their strong economic ties in the EEA, the EU has said.

In addition to these measures, the EU is pursuing a "steel partnership" with the US to ringfence their respective economies from excess production.

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