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The European Union declared plans to match Donald Trump's steel tariffs, increasing to double taxes on foreign steel to 50% in a move described as "a critical danger" to the sector in Britain.

Unprecedented Crisis for UK Steel Industry

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

New EU Measures and Rules

In its plan submitted to the European parliament this week, the EU executive also proposed reducing the existing quota for tariff-exempt steel and requiring foreign suppliers to state where the steel was melted and poured to prevent Chinese producers sneaking products in through other countries.

EU steel sector stood at the brink of failure – we are protecting it so that investments can be made, decarbonise, and regain competitiveness.

Overhaul of Current Framework

The proposals are intended to replace a quota system that has been functioning for the past seven years and which is due to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "disastrous" for the sector, one EU official said.

Industry Response and Warnings

However, Gareth Stace, head of the industry body British Steel, said EU increasing duties would pose "the most severe challenge the British steel sector has encountered".

There were calls for the UK authorities to "recognise the urgent need to implement its own measures to defend" the British steel sector – which is affected by a 25% tariff from the US earlier this year – from the risk of vast quantities of global steel redirected from US and European markets.

This surge in foreign steel "might prove terminal for many of our remaining steel companies.

Labor and Government Calls

Alasdair McDiarmid, assistant general secretary at steelworkers' union the industry union, stated the new measures posed "a survival risk" to UK steel.

Unions and industry leaders urged the UK government to begin talks immediately with the EU on country-specific tariff exemptions, noting that the UK was now the EU's primary export market.

Broader Context

Sector representatives in the European Union have also been warning for months that their own industry confronts being "eliminated" through the new 50% tariffs on American market shipments along with high energy costs and low-cost Chinese imports.

Steel on in both the UK and EU is described as a foundational industry, supplying basic materials in everything from skyscraper structures, wind turbines and railways to household appliances and cutlery.

Implementation and Future Actions

The new measures require approval by member states and the European parliament, with the European Commission president calling on national governments and European parliament members to move quickly in support of the proposal.

If the plan is ratified, the EU will cut its current duty-free quota by 47% to 18.3 million tons a year, a level last seen in 2013. It will impose a 50% tariff on foreign steel exceeding the limit and require nations shipping to the bloc to state the production origin to avoid bypassing of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs due to their close trading relationship in the EEA, the European Union 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, before all lights go out in significant portions of the EU steel industry and its supply networks.