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EU officials revealed plans to mirror the United States' steel tariffs, increasing to double levies on foreign steel to 50% in a action condemned as "an existential threat" to the industry in Britain.

Major Challenge for British Steel Exports

With eighty percent of UK steel shipments destined for the European Union, this policy shift represents the UK steel industry's biggest ever crisis, as stated by the lobby group speaking for the industry.

New EU Proposals and Rules

Through its proposal submitted to the EU legislature this week, the EU executive additionally suggested slashing the existing quota for duty-free imports and obliging foreign suppliers to declare the origin of steel production to prevent China diverting exports through other countries.

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

Overhaul of Current Framework

These measures are designed to replace a quota system that has been functioning for the last seven years and which is set to expire in 2026 and is now seen as outdated. Inaction could have been "fatal" for the sector, one EU official said.

Sector Response and Concerns

Nevertheless, Gareth Stace, head of the trade association UK Steel, stated EU increasing duties would create "the most severe challenge the British steel sector has ever faced".

He called on the government to "acknowledge the critical necessity to put in place its own measures to defend" the British steel sector – which is still reeling from a 25% duty from the US recently – from the threat of millions of tonnes of world steel diverted away from American and EU markets.

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

Labor and Government Pressure

Alasdair McDiarmid, representative at labor union the industry union, stated the proposed changes represented "a survival risk" to British steel production.

Labor and business representatives urged Keir Starmer to start negotiations urgently with the EU on nation-specific tariff exemptions, noting that the United Kingdom was now the European Union's No 1 trading partner.

Broader Context

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

Steel on in both the UK and EU is described as a essential sector, supplying basic materials in everything from building frameworks, wind turbines and railways to household appliances and cutlery.

Implementation and Future Actions

These proposals require approval by EU nations and the EU legislature, with the EU executive head urging national governments and European parliament members to move quickly in support of the proposal.

Should approval be granted, the EU will cut its existing tariff-free allowance by 47% to 18.3 million tons a annually, a volume last seen in 2013. It will apply a 50% tariff on imports beyond the quota and oblige nations shipping to the EU to declare where the steel was melted and poured to avoid bypassing of the measures.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their strong economic ties in the European Economic Area, the EU has confirmed.

In addition to these measures, the EU is pursuing a "metals alliance" with the United States to ringfence their national industries from excess production.

The European Union must take immediate action, and firmly, before operations cease in significant portions of the European steel sector and its supply networks.