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The UK’s steel industry is facing a potential crisis as the EU plans to increase tariffs on imported steel. This move, described by the industry as possibly the biggest challenge it has ever encountered, aims to cut the amount of steel imported into the bloc by half, with new 50% tariffs applying beyond that limit. In a market where the EU is the UK’s primary export destination for steel, the implications of these tariffs could be significant, given that nearly £3bn worth of steel products are exported to the EU, representing 78% of the UK’s steel products for foreign markets.
Pressure from member states and their struggling steel industries, unable to compete with cheap imports from countries like China and Turkey, has led to the EU proposing a reduction of tariff-free quotas for imports to 18.3 million tonnes annually, a 47% cut from 2024 levels. The implementation of these measures is set for early next year, pending approval from the majority of EU member states and the European Parliament. Stéphane Séjourné, the European Commission’s executive vice president for prosperity and industrial strategy, explained that the decision was a response to global overcapacity, unfair competition, state aid, and price undercutting, noting that 18,000 jobs were lost in the steel sector in 2024, calling for action to prevent further losses.
The UK steel industry, already grappling with challenges, faces additional setbacks as a proposed agreement to eliminate tariffs on UK steel exports to the US was indefinitely postponed in September. Struggling firms have led to government interventions, with Chinese-owned plants in Scunthorpe taken over earlier this year and Liberty Steel plants in Rotherham and Stocksbridge collapsing into government control the previous month. Prime Minister Sir Keir Starmer vowed strong government support for the British steel industry, acknowledging the potential impact of EU tariffs. However, discussions remain ongoing regarding potential exemptions or negotiations with the EU to safeguard the industry’s interests.
Responding to the EU’s announcement, Director General of UK Steel Gareth Stace emphasized the need for the government to leverage the UK’s trading relationship with the EU to secure country quotas or face potential disaster. The move by the EU reflects a broader trend of global protectionism in response to US President Donald Trump’s tariff increases on foreign steel. Canada, Mexico, and Brazil have also taken steps to protect domestic steelmakers. Concerns loom regarding the possibility of redirected steel shipments towards the UK, which could have dire consequences for the remaining steel companies. As discussions progress, the government seeks urgent clarification on the implications of the EU’s decision and reaffirms its commitment to supporting the steel industry through trade measures and industry-focused initiatives
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