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EU officials have announced plans to mirror the United States' import duties on steel, increasing to double taxes on imports to fifty percent in a decision condemned as "a survival risk" to the sector in the UK.

Major Challenge for UK Steel Exports

Given that 80% of British exports going to the EU, this policy shift poses the UK steel industry's most severe crisis, according to the industry association representing the sector.

New EU Measures and Regulations

Through its proposal presented to the European parliament this week, the EU executive additionally suggested reducing the existing quota for duty-free imports and obliging foreign suppliers to declare where the steel was melted and poured to stop Chinese producers sneaking products in through other countries.

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

Replacement of Existing System

The proposals are designed to supersede a quota system that has been in operation for the last seven years and which is due to expire in 2026 and is now considered outdated. Inaction could have been "fatal" for the sector, one EU official said.

Industry Reaction and Warnings

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

There were calls for the government to "recognise the urgent need 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 world steel diverted away from American and EU markets.

This flood of imports "could be terminal for many of our remaining steel companies.

Labor and Political Pressure

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

Unions and industry leaders urged Keir Starmer to start negotiations immediately with the European Union on nation-specific duty-free quotas, pointing out that the United Kingdom was now the EU's primary trading partner.

Industry Background

Industry leaders in the European Union have also been warning for months that their own industry confronts being "eliminated" through the increased duties on American market shipments along 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 products ranging from building frameworks, renewable energy equipment and transport infrastructure to dishwashers and kitchenware.

Adoption and Next Steps

The new measures require approval by EU nations and the EU legislature, with the European Commission president calling on member states and European parliament members to act fast in backing the initiative.

If the plan is ratified, the European Union will reduce its current duty-free quota by 47% to 18.3 million tons a annually, a level previously recorded in 2013. It will apply a 50% duty on foreign steel exceeding the limit and require nations exporting into the bloc to declare where the steel was melted and poured to avoid bypassing of the sanctions.

Exceptions and Global Partnerships

Norway, Iceland, and Liechtenstein will be exempt from tariff quotas or tariffs because of their strong economic ties in the EEA, the European Union has said.

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

The European Union needs to act now, and decisively, before operations cease in significant portions of the EU steel industry and its supply networks.