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The European Union have announced plans to mirror the United States' steel tariffs, effectively doubling taxes on imports to 50% in a action condemned as "an existential threat" to the industry in the UK.

Unprecedented Crisis for UK Steel Exports

With eighty percent of UK steel shipments destined for the EU, this policy shift represents the British steel sector's biggest ever crisis, as stated by the industry association representing the industry.

European Commission Proposals and Rules

Through its proposal submitted to the EU legislature on Tuesday, the EU executive also proposed cutting the current allowance for duty-free imports and requiring international producers to declare where the steel was melted and poured to prevent China diverting exports through other countries.

The European steel industry faced potential collapse – these measures safeguard it so that investments can be made, decarbonise, and regain competitiveness.

Overhaul of Existing System

These measures are designed to supersede a import framework that has been in operation for the past seven years and which is due to expire in 2026 and is now considered ineffective. To do nothing could have been "disastrous" for the industry, one EU official said.

Sector Response and Warnings

Nevertheless, industry representatives, from the trade association British Steel, said Brussels doubling its tariffs would pose "the biggest crisis the British steel sector has encountered".

He called on the UK authorities to "acknowledge the critical necessity to implement domestic protections to protect" the UK steel industry – which is affected by a 25% duty imposed by the US earlier this year – from the risk of millions of tonnes of global steel diverted away from American and EU markets.

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

Union and Political Calls

Union leaders, representative at labor union the industry union, said the new measures represented "an existential threat" to British steel production.

Unions and industry leaders urged the UK government to start negotiations immediately with the European Union on nation-specific duty-free quotas, noting that the United Kingdom was now the European Union's No 1 export market.

Broader Context

Sector representatives in the EU have also been warning for several months that their own industry confronts being "eliminated" through the increased duties on exports to the US combined with high energy costs and cheap Chinese competition.

Steel on in both the UK and EU is considered a foundational industry, supplying basic materials in everything from skyscraper structures, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Next Steps

These proposals require approval by member states and the EU legislature, with the EU executive head urging member states and MEPs to move quickly in support of the initiative.

Should approval be granted, the EU will cut its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a level last seen in 2013. It will apply a 50% tariff on imports beyond the quota and oblige countries shipping to the bloc to state the production origin to prevent circumvention of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their close trading relationship in the European Economic Area, the European Union has said.

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

EU needs to act now, and firmly, before operations cease in large parts of the EU steel industry and its supply networks.