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The European Union have announced plans to adopt Donald Trump's import duties on steel, effectively doubling taxes on imports to fifty percent in a action described as "a survival risk" to the industry in the UK.

Unprecedented Crisis for UK Steel Industry

Given that 80% of UK steel shipments going to the EU, this policy shift represents the UK steel industry's largest crisis, as stated by the industry association speaking for the industry.

New EU Proposals and Regulations

Through its proposal presented to the EU legislature this week, the EU executive additionally suggested slashing the existing quota for tariff-exempt steel and obliging international producers to declare where the steel was melted and poured to stop Chinese producers sneaking products in through third nations.

EU steel sector faced potential collapse – these measures safeguard it so that investments can be made, reduce emissions, and become competitive again.

Replacement of Current Framework

The proposals are designed to replace a quota system that has been in operation for the past seven years and which is due 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 said.

Industry Reaction and Concerns

However, Gareth Stace, from the industry body UK Steel, said EU doubling its tariffs would pose "the most severe challenge the UK steel industry has ever faced".

There were calls for the government to "acknowledge the critical necessity to put in place domestic protections to protect" the UK steel industry – which is affected by a 25% duty 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 numerous steel companies.

Labor and Political Calls

Union leaders, representative at labor union Community, stated the proposed changes posed "a survival risk" to UK steel.

Labor and business representatives called on the UK government to start negotiations urgently with the EU on nation-specific duty-free quotas, noting that the UK was now the EU's primary trading partner.

Broader Context

Industry leaders in the European Union have also been warning for months that the European steel sector faces being "eliminated" through the new 50% tariffs on exports to the US combined with high energy costs and cheap Chinese competition.

The steel industry on in both the UK and EU is considered a foundational industry, providing elemental components in everything from skyscraper structures, wind turbines and transport infrastructure to dishwashers and kitchenware.

Implementation and Future Actions

These proposals require approval by member states and the EU legislature, with the European Commission president urging member states and MEPs to act fast in backing the initiative.

Should approval be granted, the European Union will reduce its existing tariff-free allowance by 47% to 18.3m tonnes a annually, a volume last seen in 2013. It will impose a 50% tariff on imports exceeding the limit and require nations shipping to the bloc to state the production origin to avoid bypassing of the sanctions.

Exceptions and International Cooperation

Norway, Iceland, and Liechtenstein will be exempt from import limits or duties due to their close trading relationship in the EEA, the European Union has confirmed.

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

The European Union must take immediate action, and decisively, prior to all lights go out in large parts of the EU steel industry and its value chains.