The European Union has said it will match Donald Trump’s steel tariffs, in a move that has been labelled an “existential threat” to the UK steel industry.
In a plan presented to the European parliament on Tuesday, the European Commission said the trade bloc should impose tariffs on all imports to try and progress negotiations with America and fight cheap steel from Asia.
Officials said the tariffs would be an “important stepping stone” in negotiations with the US over the scrapping of their 50% tariff on EU steel imports, the Guardian reports.
The proposals are designed to replace a quote system that has been in place for the last seven years. This would see the EU educe its current duty-free quota by 47% to 18.3m tonnes a year, and impose a 50% tariff on imports beyond the quota.
The EU’s commissioner for industry , Stéphane Séjourné, said: “The European steel industry was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again.”
However, there are fears the move could have a disastrous effect on the UK steel industry as an 80% of British exports are to the EU.
The lobby group representing the sector has said the EU tariffs would pose “the biggest crisis the industry has ever faced.”
Gareth Stace, head of the industry body UK Steel, called on the government to “recognise the urgent need to put in place its own measures to defend” the UK steel industry.
Meanwhile, Alasdair McDiarmid, assistant general secretary at steelworkers’ union Community, said the proposals posed “an existential threat” to UK steel.
Donald Trump’s administration has imposed a 25% tariff on UK steel, but the new EU tariffs could prompt foreign exporters to divert more of their steel to the UK. Stace said this flood of imports could be “terminal for many of our remaining steel companies.”
Keir Starmer’s government has been urged to start negotiations with the EU on country-specific duty-free quotas, just months after agreeing a new deal with the bloc.
McDiarmid said: “A trade war, at what is already a turbulent time for the global steel industry, would be incredibly damaging for everyone involved, with workers in the UK and Europe paying the heaviest price.
“The stakes could not be higher, and time is of the essence. We would urge the UK and EU to begin urgent negotiations and do everything possible to prevent the crushing impact these proposals would have on our steel industry.”
The new measures from the EU 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.