‘Crisis’: Why EU plan for 50 percent tariff is spooking British steel

The European Union’s program to hike tariffs connected alloy imported implicit and supra its yearly threshold could extremity the United Kingdom’s alloy manufacture into its worst situation successful history, manufacture leaders person warned.

On Tuesday, the European Commission proposed that the 27-member bloc would slash its tariff-free alloy import quota by 47 percent to 18.3 cardinal tonnes and would enforce a tariff of 50 percent connected immoderate alloy imported successful excess of this amount.

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This represents a crisp hike: The EU’s existent yearly alloy import quota stands astatine 33 cardinal tonnes, and imports supra this bounds are taxable to a 25 percent tariff.

The announcement has rattled the British alloy industry, which exports astir 80 percent of its alloy to the EU.

“This is possibly the biggest situation the UK alloy manufacture has ever faced,” Gareth Stace, manager wide of the lobby radical UK Steel, said connected Tuesday. He described the determination arsenic a “disaster” for British steel.

Community, a commercialized national representing UK steelworkers, said the EU’s connection represents an “existential threat” to the UK alloy industry.

Here’s what we cognize astir the EU’s caller levies and wherefore the UK is worried:

Why has the EU announced a tariff hike for alloy imports?

The caller tariff is expected to travel into effect from June 2026, arsenic agelong arsenic EU countries and the European Parliament o.k. it.

The EU says it has nary prime but to bring successful the caller tariff arsenic it seeks to support its ain markets from a flood of subsidised Asian steel, which has been diverted by US President Donald Trump’s latest 50 percent tariff connected each alloy imports to the US.

The EU besides wants to support its alloy assemblage from the situation of planetary overcapacity.

In a code astatine the European Parliament successful Strasbourg connected Tuesday, the European Commissioner for Trade and Economic Security, Maros Sefcovic, defended the bloc’s alloy tariffs connection arsenic a determination to “protect the bloc’s captious sector” whose alloy commercialized equilibrium has “deteriorated dramatically”.

Sefcovic added that much than 30,000 jobs person been mislaid since 2018 successful the EU’s alloy industry, which employs astir 300,000 radical overall.

While the manufacture is ailing, helium said, different countries person begun imposing tariffs and different safeguards to guarantee their ain home alloy industries expand. The Commission’s proposal, therefore, seeks to “restore equilibrium to the EU alloy market”.

More succinctly, a elder EU authoritative told The Times newspaper: “My beloved UK friends, you person to recognize that we person nary prime but to bounds the full volumes of imports that travel into the EU, truthful this is the logic that we use clearly. Not acting could effect successful perchance fatal effects for us.”

The EC’s connection comes arsenic the bloc’s alloy assemblage faces stiff contention from countries similar China, wherever alloy accumulation is heavy subsidised.

China produced much than a cardinal metric tonnes of alloy past year, followed by India, astatine 149 cardinal metric tonnes, and Japan, astatine 84 cardinal metric tonnes, according to the World Steel Association, a nonprofit organisation with office successful Brussels.

By comparison, said Sefcovic, the EU produces 126 cardinal tonnes per twelvemonth but lone requires 67 percent of this for its ain usage – “well beneath the steadfast 80 percent benchmark and beneath profitable levels”.

Moreover, alloy accumulation wrong the EU has declined by 65 cardinal tonnes per twelvemonth since 2007 – with astir fractional of that mislaid since 2018.

“A strong, decarbonised alloy assemblage is captious for the European Union’s competitiveness, economical information and strategical autonomy. Global overcapacity is damaging our industry,” EC President Ursula von der Leyen said.

The Commission’s manufacture chief, Stephane Sejourne, told reporters successful Strasbourg that “the European alloy manufacture was connected the verge of collapse” and said that done the tariffs plan, the Commission is “protecting it [EU’s alloy industry] truthful that it tin invest, decarbonise and go competitory again”.

Sejourne added that the Commission’s program is “in enactment with our [EU] values and planetary law”.

Why would the UK carnivore the brunt of EU alloy tariffs?

The EU is the UK’s largest marketplace for alloy exports by far. In 2024, the UK exported 1.9 cardinal metric tonnes of steel, worthy astir 3 cardinal pounds ($4.02bn) and representing 78 percent of its home-made alloy products to the EU.

While the EC’s alloy tariffs connection does not use to members of the European Economic Area, namely Norway and Iceland, it volition use to the UK and Switzerland. Ukraine volition besides beryllium exempt from the tariff quota since it is facing “an exceptional and contiguous information situation”, according to the EC.

The EU says it is unfastened to negotiations with the UK erstwhile it has formally notified the World Trade Organization (WTO) of the caller levy. For now, however, uncertainty looms.

Compounding this, the UK besides fears being flooded by cheaper, subsidised alloy from Asia arsenic some the EU and US markets adjacent their doors to it.

In a statement, UK Steel added: “The imaginable for millions of tonnes that volition beryllium barred from the EU market, to beryllium redirected towards the UK is different existential threat.”

Nicolai von Ondarza, an subordinate chap astatine Chatham House, the London-based argumentation institute, told Al Jazeera that inexpensive alloy diverted by the EU’s planned tariffs volition mostly travel from countries similar China, “putting further unit connected its industry”.

The British alloy assemblage is besides shouldering Trump’s 25 percent tariff connected British alloy imports, a planetary proviso glut, and higher vigor prices, and has been embattled by occupation losses successful immoderate of its biggest steelworks owed to greenish modulation initiatives.

Can the UK negociate its mode retired of this?

That is presently its champion hope, according to manufacture leaders.

“We would impulse the UK and EU to statesman urgent negotiations and bash everything imaginable to forestall the crushing interaction these proposals would person connected our alloy industry,” helium added.

Chatham House’s Ondarza told Al Jazeera: “For the UK, the archetypal way is to effort to negociate a carve-out of these EU tariffs. Both the EC and the UK person already signalled willingness to talk. These negotiations are apt to beryllium tricky, but not improbable that they travel to an agreement.”

On his mode for a two-day concern travel to India, UK Prime Minister Keir Starmer told reporters that his state is “in discussions with the EU” astir the proposal.

“I’ll beryllium capable to archer you much successful owed course, but we are successful discussions, arsenic you’d expect,” helium said.

Meanwhile, Chris McDonald, the UK manufacture minister, has suggested that retaliatory measures whitethorn not beryllium wholly disconnected the table.

“We proceed to research stronger commercialized measures to support UK alloy producers from unfair behaviours,” helium told reporters.

If the US caused this, tin it assistance to lick it?

While the EU’s tariffs connection has led to an outcry successful the UK, it is besides a measurement which seeks to bring the US to the negotiating table, the EC says.

In August, the EU and US agreed a commercialized woody nether which Washington volition levy 15 percent tariffs connected 70 percent of Europe’s exports to the country. Brussels and Washington person yet to sermon however tariffs would use to European steel, which inactive faces a 50 percent tariff nether Trump’s caller commercialized regime.

Sefcovic told reporters the Commission’s alloy tariffs connection would beryllium a bully instauration to prosecute with the US and besides combat the situation of overcapacity arsenic “like-minded partners”.