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The European Union have announced plans to mirror the United States' import duties on steel, effectively doubling taxes on imports to fifty percent in a decision described as "an existential threat" to the industry in the UK.

Unprecedented Crisis for UK Steel Exports

With 80% of UK steel shipments destined for the European Union, this policy shift creates the British steel sector's biggest ever challenge, according to the industry association representing the industry.

New EU Measures and Regulations

Through its proposal presented to the European parliament this week, the EU executive also proposed slashing the existing quota for duty-free imports and obliging international producers to state the origin of steel production to stop China diverting exports through other countries.

EU steel sector was on the verge of collapse – these measures safeguard it so that investments can be made, decarbonise, and become competitive again.

Overhaul of Current Framework

The proposals are intended to replace a quota system that has been in operation for the last seven years and which is set to expire in 2026 and is now seen as ineffective. Inaction could have been "catastrophic" for the sector, one EU official said.

Industry Reaction and Concerns

However, industry representatives, head of the trade association British Steel, stated EU doubling its tariffs would create "the biggest crisis the UK steel industry has ever faced".

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 still reeling from a 25% duty from the US earlier this year – from the risk of millions of tonnes of world steel diverted away from American and EU markets.

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

Union and Political Calls

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

Unions and industry leaders urged the UK government to start negotiations immediately with the EU on country-specific tariff exemptions, noting that the United Kingdom was now the EU's No 1 export market.

Industry Background

Sector representatives in the EU have also been warning for months that the European steel sector confronts being "eliminated" through the new 50% tariffs on American market shipments combined with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is considered a foundational industry, providing elemental components in everything from skyscraper structures, renewable energy equipment and transport infrastructure to dishwashers and kitchenware.

Implementation and Next Steps

These proposals require approval by member states and the European parliament, with the European Commission president calling on member states and European parliament members to act fast in backing the initiative.

Should approval be granted, the European Union will cut its existing tariff-free allowance by 47% to 18.3 million tons a annually, a level last seen in 2013. It will apply a 50% duty on foreign steel beyond the quota and oblige countries shipping to the bloc to declare where the steel was melted and poured to prevent circumvention of the measures.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties due to their strong economic ties in the EEA, the EU has confirmed.

Alongside the proposal, the European Union is pursuing a "metals alliance" with the United States to protect their national industries from excess production.

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