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EU officials revealed plans to adopt Donald Trump's import duties on steel, increasing to double levies on foreign steel to fifty percent in a move described as "an existential threat" to the sector in the UK.

Major Challenge for UK Steel Industry

Given that 80% of British exports destined for the EU, this change poses the UK steel industry's biggest ever challenge, as stated by the lobby group representing the industry.

European Commission Proposals and Rules

In its plan submitted to the European parliament on Tuesday, the EU executive also proposed reducing the current allowance for tariff-exempt steel and requiring international producers to state where the steel was melted and poured to prevent Chinese producers diverting exports through other countries.

The European steel industry faced potential collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

These measures are intended to supersede a import framework that has been functioning for the last seven years and which is set to expire in 2026 and is now considered not fit for purpose. To do nothing could have been "fatal" for the sector, one EU official said.

Sector Reaction and Concerns

However, Gareth Stace, from the industry body UK Steel, said EU doubling its tariffs would create "the biggest crisis the British steel sector has encountered".

He called on the government to "recognise the critical necessity to put in place its own measures to defend" the British steel sector – which is still reeling from a 25% tariff imposed by the US recently – from the threat of millions of tonnes of global steel redirected from American and EU markets.

This surge in foreign steel "could be fatal for numerous steel companies.

Labor and Government Calls

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

Labor and business representatives urged Keir Starmer to begin talks urgently with the EU on country-specific duty-free quotas, pointing out that the United Kingdom was now the EU's No 1 export market.

Broader Context

Sector representatives in the European Union have repeatedly cautioned for several months that their own industry faces being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and cheap Chinese competition.

The steel industry on in both the UK and EU is described as a foundational industry, providing elemental components in products ranging from building frameworks, wind turbines and railways to household appliances and cutlery.

Adoption and Next Steps

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

If the plan is ratified, the European Union will reduce its existing tariff-free allowance by forty-seven percent to 18.3 million tons a year, a level previously recorded in 2013. It will impose a fifty percent duty on imports beyond the quota and oblige countries exporting into the EU to state the production origin to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

These European nations will be exempt from tariff quotas or tariffs due to their strong economic ties in the EEA, the EU has said.

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

The European Union must take immediate action, and firmly, prior to operations cease in significant portions of the EU steel industry and its supply networks.