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The European Union revealed plans to match the United States' import duties on steel, increasing to double taxes on foreign steel to 50% in a action condemned as "a survival risk" to the industry in the UK.

Major Challenge for UK Steel Industry

With eighty percent of UK steel shipments destined for 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 Rules

Through its proposal submitted to the EU legislature on Tuesday, the European Commission also proposed cutting the current allowance for tariff-exempt steel and requiring foreign suppliers to disclose where the steel was melted and poured to stop Chinese producers diverting exports through third nations.

The European steel industry stood at the brink of failure – these measures safeguard it so that it can invest, reduce emissions, and regain competitiveness.

Replacement of Current Framework

These measures are intended to supersede a quota system that has been in operation for the past seven years and which is set to expire in 2026 and is now considered ineffective. To do nothing could have been "catastrophic" for the industry, one EU official stated.

Sector Response and Concerns

However, Gareth Stace, head of the trade association UK Steel, stated Brussels doubling its tariffs would pose "the most severe challenge the UK steel industry has encountered".

He called on the UK authorities to "acknowledge the critical necessity to implement its own measures to defend" the UK steel industry – which is affected by a 25% tariff imposed by the US recently – from the risk of vast quantities 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 Government Pressure

Alasdair McDiarmid, assistant general secretary at steelworkers' union Community, stated the proposed changes represented "a survival risk" to British steel production.

Labor and business representatives urged the UK government to begin talks urgently with the EU on nation-specific duty-free quotas, pointing out that the UK was now the EU's primary export market.

Industry Background

Sector representatives in the European Union have also been warning for months that the European steel sector faces being "eliminated" through the increased duties on exports to the US combined with high energy costs and low-cost Chinese imports.

Steel on both sides of the Channel is described as a essential sector, providing elemental components in products ranging from building frameworks, wind turbines and railways to household appliances and cutlery.

Implementation and Next Steps

The new measures require approval by member states and the European parliament, with the EU executive head calling on national governments and MEPs to act fast in support of the proposal.

If the plan is ratified, the EU will cut its current duty-free quota by 47% to 18.3m tonnes a annually, a level last seen in 2013. It will impose a fifty percent tariff on foreign steel beyond the quota and oblige countries exporting into the EU to state where the steel was melted and poured to prevent circumvention of the measures.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or tariffs due to their close trading relationship in the European Economic Area, the EU has said.

Alongside the proposal, the EU is seeking a "steel partnership" with the US to ringfence their respective economies from overcapacity.

EU needs to act now, and decisively, prior to operations cease in significant portions of the European steel sector and its value chains.