EU plan to match Trump steel tariffs spurs ‘existential threat’ to UK steel industry

The EU has announced it will match Donald Trump’s steel tariffs, doubling levies on imports to 50% in a decision condemned as “an existential threat” to the industry in the UK.

With 80% of British exports going to the EU, the change poses the UK steel industry’s biggest ever crisis, according to the lobby group representing the sector, while unions said they could kill off the industry.

Speaking to reporters on a flight to India, Keir Starmer said ministers and officials were in discussions with the EU about the tariff proposals.

“I think our position in relation to our steel industry is one of strong support as you saw from Scunthorpe and Port Talbot,” he said. “In relation to the question of tariffs or other measures, as you’d expect, we are in discussions with the EU about this, as we’re in discussions with the US about it. So I’ll be able to tell you more in due course, but we are in discussions as you’d expect.”

The prime minister declined to go into further details about what ministers were asking from Brussels. “I’m not going to go into the details, but I’m going to tell you in clear terms as you would expect we are discussing this with the EU and with the US.”

Chris McDonald, the industry minister, said it was “vital” to “protect trade flows between the UK and EU” and that he would meet industry leaders on Thursday. He added he was “pushing the European Commission for urgent clarification of the impact of this move on the UK”.

In its plan presented to the European parliament on Tuesday, the European Commission also proposed slashing the existing quota for duty-free imports and obliging foreign suppliers to declare where the steel was melted and poured to prevent China sneaking products in through other countries.

Senior officials said rules would be an “important stepping stone” to progress negotiations with the US and prove to Trump that the EU had a common foe in Beijing.

“The European steel industry was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again,” the bloc’s commissioner for industry, Stéphane Séjourné, told an event in Strasbourg.

The proposals are designed to replace a quota system that has been in operation for the last 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 industry, one EU official said.

The source said the new proposals were intended to act as “an important stepping stone” in negotiations with the US over the scrapping of the current 50% tariff on EU steel imports by signalling joint opposition to Chinese steel dumping.

However, Gareth Stace, the head of the industry body UK Steel, said Brussels doubling its tariffs would pose “the biggest crisis the UK steel industry has ever faced”.

He called on the government to “recognise the urgent need to put in place its own measures to defend” the UK steel industry – which is still reeling from a 25% tariff imposed by the US president earlier this year – from the threat of millions of tonnes of world steel diverted away from US and European markets. This flood of imports could be “terminal for many of our remaining steel companies”, Stace said.

Alasdair McDiarmid, the assistant general secretary at steelworkers’ union Community, said the new measures posed “an existential threat” to UK steel.

Charlotte Brumpton-Childs, national officer with the GMB trade union, called the tariffs a “hammer blow” that “could be the end of steelmaking in the UK if proper safeguards aren’t secured”.

The EU trade commissioner, Maroš Šefčovič, denied the move was hostile to the UK, noting that once it had submitted the proposals to the World Trade Organization the commission would discuss an “allocation of the steel quota for UK”.

Unions and industry leaders had urged Starmer to start negotiations urgently with the EU on country-specific duty-free quotas, noting that the UK was now the EU’s No 1 export market.

Industry leaders in the EU have also been warning for months that their own industry faced being “wiped out” through the new 50% tariffs on exports to the US along with high energy costs and cheap Chinese competition.

Steel on both sides of the Channel is described as a foundational industry, providing elemental components in everything from skyscraper structures, wind turbines and railways to dishwashers and cutlery.

Senior EU officials say the glut of supplies from China’s steel industry is seen as the “main problem” and has become “absolutely untenable” and is “worsening”.

The new measures must be agreed by member states and the European parliament, with the European Commission president, Ursula von der Leyen, urging national governments and MEPs to act fast in support of the initiative.

If the plan is ratified, the EU will reduce its current duty-free quota by 47% to 18.3m tonnes a year, a level last seen in 2013. It will impose a 50% tariff on imports beyond the quota and oblige countries exporting into the bloc to state where the steel was melted and poured to prevent circumvention of the sanctions.

Norway, Iceland and Liechtenstein will not be subject to tariff quotas or duties owing to their close trading relationship in the European Economic Area, the EU has said.

Alongside the proposal, the EU is seeking a “metals alliance” with the US to ringfence their respective economies from overcapacity.

“The European Union needs to act now, and decisively, before all lights go out in large parts of the EU steel industry and its value chains,” said the president of industry group Eurofer, Henrik Adam.