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The European Union declared they will adopt Donald Trump's steel tariffs, increasing to double taxes on foreign steel to 50% in a move described as "a survival risk" to the sector in Britain.

Major Challenge for UK Steel Industry

Given that 80% of UK steel shipments going to the European Union, this change represents the British steel sector's most severe crisis, according to the lobby group speaking for the industry.

New EU Proposals and Rules

Through its proposal submitted to the EU legislature this week, the European Commission also proposed slashing the current allowance for tariff-exempt steel and obliging foreign suppliers to declare where the steel was melted and poured to stop Chinese producers sneaking products in through third nations.

EU steel sector was on the verge of collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Overhaul of Existing System

The proposals 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 ineffective. Inaction could have been "fatal" for the industry, one EU official stated.

Industry Reaction and Warnings

Nevertheless, Gareth Stace, from the trade association British Steel, said Brussels increasing duties would create "the biggest crisis the British steel sector has encountered".

There were calls for the government to "recognise the critical necessity to put in place its own measures to defend" the UK steel industry – which is still reeling from a 25% tariff from the US recently – from the risk of millions of tonnes of global steel diverted away from American and EU markets.

This flood of imports "might prove terminal for numerous steel companies.

Labor and Political Calls

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

Unions and industry leaders urged Keir Starmer to start negotiations urgently with the European Union on country-specific duty-free quotas, pointing out that the UK was now the European Union'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 "wiped out" through the increased duties on exports to the US combined with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is considered a foundational industry, providing elemental components in everything from skyscraper structures, wind turbines and railways to household appliances and kitchenware.

Implementation and Next Steps

The new measures require approval by member states and the European parliament, with the European Commission president urging 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 annually, a volume last seen in 2013. It will impose a 50% tariff on imports beyond the quota and oblige countries shipping to the bloc to state where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and International Cooperation

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

Alongside the proposal, the European Union is pursuing a "steel partnership" with the United States to ringfence their national industries from excess production.

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