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The European Union declared they will adopt Donald Trump's import duties on steel, increasing to double levies on foreign steel to fifty percent in a decision condemned as "an existential threat" to the sector in the UK.

Major Challenge for UK Steel Industry

With eighty percent of British exports destined for the European Union, this change creates the UK steel industry's most severe crisis, as stated by the lobby group representing the industry.

New EU Proposals and Regulations

In its plan submitted to the EU legislature this week, the EU executive additionally suggested reducing the current allowance for duty-free imports and obliging international producers to state the origin of steel production to prevent China diverting exports through third nations.

EU steel sector faced potential collapse – we are protecting it so that it can invest, decarbonise, and regain competitiveness.

Overhaul of Existing System

The proposals are intended to replace a import framework that has been in operation for the last seven years and which is set to expire in 2026 and is now seen as not fit for purpose. Inaction could have been "catastrophic" for the industry, one EU official said.

Sector Response and Concerns

However, industry representatives, head of the trade association British Steel, said EU increasing duties would pose "the biggest crisis the British steel sector has ever faced".

He called on the government to "recognise the critical necessity to implement its own measures to defend" the British steel sector – which is affected by 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 flood of imports "might prove fatal for numerous steel companies.

Union and Government Pressure

Alasdair McDiarmid, representative at labor union the industry union, said the proposed changes posed "an existential threat" to UK steel.

Labor and business representatives urged the UK government to begin talks immediately with the European Union on nation-specific duty-free quotas, noting that the United Kingdom was now the EU's No 1 trading partner.

Industry Background

Industry leaders in the European Union have repeatedly cautioned for months that the European steel sector faces being "eliminated" through the new 50% tariffs on American market shipments combined with rising energy prices and low-cost Chinese imports.

Steel on both sides of the Channel is described as a foundational industry, supplying basic materials in products ranging from building frameworks, renewable energy equipment and transport infrastructure to household appliances and cutlery.

Adoption and Future Actions

The new measures require approval by member states and the European parliament, with the EU executive head urging national governments and European parliament members to move quickly in support of the initiative.

Should approval be granted, the European Union will reduce its current duty-free quota by 47% to 18.3m tonnes a annually, a level last seen in 2013. It will impose a 50% duty on foreign steel beyond the quota and require nations exporting into the bloc to state where the steel was melted and poured to avoid bypassing of the sanctions.

Exemptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from 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 United States to ringfence their national industries from overcapacity.

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