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The European Union revealed plans to match Donald Trump's steel tariffs, effectively doubling taxes on imports to 50% in a action described as "a critical danger" to the industry in the UK.

Major Challenge for British Steel Exports

Given that eighty percent of British exports destined for the EU, this policy shift represents the British steel sector's largest crisis, according to the lobby group representing the sector.

European Commission Proposals and Rules

In its plan submitted to the European parliament this week, the EU executive additionally suggested cutting the existing quota for tariff-exempt steel and obliging international producers to declare where the steel was melted and poured to prevent China diverting exports through other countries.

EU steel sector stood at the brink of failure – these measures safeguard it so that investments can be made, reduce emissions, and regain competitiveness.

Overhaul of Current Framework

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

Industry Response and Concerns

Nevertheless, Gareth Stace, from the trade association UK Steel, said EU doubling its tariffs would create "the most severe challenge the UK steel industry has encountered".

He called on the government to "recognise the critical necessity to put in place domestic protections to protect" the British steel sector – which is affected by a 25% tariff imposed by Trump earlier this year – from the risk of millions of tonnes of global steel diverted away from US and European markets.

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

Union and Political Calls

Alasdair McDiarmid, representative at steelworkers' union Community, said the new measures posed "an existential threat" to UK steel.

Labor and business representatives urged the UK government to start negotiations immediately with the European Union on country-specific tariff exemptions, noting that the UK was now the European Union's primary trading partner.

Industry Background

Sector representatives in the European Union have also been warning for several months that their own industry faces being "wiped out" through the new 50% tariffs on exports to the US combined with high energy costs and cheap Chinese competition.

Steel on in both the UK and EU is described as a foundational industry, providing elemental components in everything from building frameworks, wind turbines and transport infrastructure to dishwashers and cutlery.

Adoption and Future Actions

The new measures require approval by EU nations and the EU legislature, with the European Commission president urging national governments and European parliament members to move quickly in support of the initiative.

If the plan is ratified, the EU will reduce its current duty-free quota by forty-seven percent to 18.3 million tons a year, a level last seen in 2013. It will apply a fifty percent duty on foreign steel exceeding the limit and require countries exporting into the EU to declare the production origin to avoid bypassing of the sanctions.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will not be subject to import limits or duties due to their close trading relationship in the EEA, the European Union has confirmed.

Alongside the proposal, the European Union is pursuing a "metals alliance" with the United States to protect their respective economies from overcapacity.

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