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The European Union declared they will match Donald Trump's import duties on steel, increasing to double levies on imports to 50% in a action described as "a survival risk" to the sector in the UK.

Major Challenge for UK Steel Exports

Given that 80% of British exports going to the European Union, this change creates the UK steel industry's largest challenge, according to the lobby group speaking for the industry.

European Commission Proposals and Rules

Through its proposal submitted to the European parliament on Tuesday, the European Commission also proposed slashing the current allowance for duty-free imports and obliging foreign suppliers to disclose the origin of steel production to prevent Chinese producers diverting exports through other countries.

EU steel sector stood at the brink of failure – these measures safeguard it so that it can invest, decarbonise, and become competitive again.

Replacement of Existing System

These measures are designed to supersede a quota system that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "fatal" for the sector, one EU official stated.

Sector Reaction and Concerns

However, Gareth Stace, from the trade association British Steel, said Brussels increasing duties would create "the most severe challenge the British steel sector has encountered".

He called on the UK authorities to "recognise the critical necessity to implement its own measures to protect" the UK steel industry – which is affected by a twenty-five percent duty imposed by the US recently – from the risk of millions of tonnes of world steel redirected from US and European markets.

This surge in foreign steel "might prove fatal for many of our remaining steel companies.

Labor and Political Pressure

Union leaders, assistant general secretary at steelworkers' union the industry union, said the proposed changes represented "a survival risk" to British steel production.

Unions and industry leaders called on the UK government to begin talks immediately with the European Union on country-specific tariff exemptions, pointing out that the UK was now the EU's primary export market.

Broader Context

Industry leaders in the European Union have also been warning for months that their own industry faces being "wiped out" through the increased duties on exports to the US along with rising energy prices and low-cost Chinese imports.

Steel on in both the UK and EU is considered a essential sector, supplying elemental components in products ranging from building frameworks, renewable energy equipment and transport infrastructure to dishwashers and cutlery.

Adoption and Next Steps

These proposals must be agreed by member states and the European parliament, with the European Commission president urging member states and MEPs to move quickly in support of the proposal.

If the plan is ratified, the EU will cut 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 imports beyond the quota and oblige nations exporting into the EU to declare the production origin to avoid bypassing of the sanctions.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or tariffs because of their strong economic ties in the European Economic Area, the European Union has said.

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

The European Union needs to act now, and decisively, before operations cease in significant portions of the EU steel industry and its value chains.