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The European Union revealed plans to mirror the United States' import duties on steel, increasing to double levies on foreign steel to 50% in a decision described as "a critical danger" to the industry in the UK.

Major Challenge for UK Steel Industry

Given that eighty percent of British exports destined for the European Union, this policy shift creates the UK steel industry's biggest ever challenge, according to the lobby group speaking for the industry.

New EU Proposals and Rules

In its plan submitted to the European parliament on Tuesday, the European Commission additionally suggested reducing the existing quota for tariff-exempt steel and requiring international producers to state where the steel was melted and poured to prevent Chinese producers diverting exports through third nations.

The European steel industry was on the verge of collapse – these measures safeguard it so that it can invest, decarbonise, and become competitive again.

Overhaul of Current Framework

These measures are intended to replace a quota system that has been functioning for the past seven years and which is set to expire in 2026 and is now seen as not fit for purpose. To do nothing could have been "fatal" for the sector, one EU official stated.

Sector Reaction and Concerns

However, industry representatives, from the industry body UK Steel, stated Brussels doubling its tariffs would create "the biggest crisis the British steel sector has encountered".

There were calls for the government to "acknowledge the urgent need to implement domestic protections to protect" the UK steel industry – which is affected by a 25% tariff imposed by the US recently – from the threat of vast quantities of world steel redirected from American and EU markets.

This surge in foreign steel "might prove fatal for numerous steel companies.

Union and Government Pressure

Union leaders, assistant general secretary at labor union Community, said the proposed changes represented "a survival risk" to UK steel.

Labor and business representatives 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 EU have repeatedly cautioned for months that the European steel sector confronts being "eliminated" through the increased duties on American market shipments combined with rising energy prices and cheap Chinese competition.

The steel industry on in both the UK and EU is described as a foundational industry, supplying elemental components in everything from building frameworks, renewable energy equipment and railways to household appliances and cutlery.

Implementation and Future Actions

These proposals require approval by member states and the European parliament, with the European Commission president urging national governments and European parliament members 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 year, a volume last seen in 2013. It will impose a fifty percent duty on imports beyond the quota and oblige nations shipping to the EU to declare the production origin to avoid bypassing of the measures.

Exceptions and International Cooperation

These European nations will not be subject to tariff quotas or tariffs due to their strong economic ties in the EEA, the European Union has confirmed.

In addition to these measures, the EU is seeking a "steel partnership" with the US to protect their respective economies from excess production.

EU must take immediate action, and decisively, prior to all lights go out in large parts of the European steel sector and its supply networks.