EU steel tariff hike threatens 'biggest ever crisis' for UK industry

The EU has announced plans to hike tariffs on imported steel in a move the UK's steel industry has said could be "perhaps the biggest crisis" it has ever faced.

The commission has set out plans to cut the amount of steel that can be imported into the bloc by half - beyond which the new 50% tariffs will apply.

The EU is the UK's most important export destination for steel, worth nearly £3bn and representing 78% of steel products made in the UK for overseas markets.

The commission has come under pressure from some member states and their steel industries, which have been struggling to compete with cheap imports from countries like China and Turkey.

The EU is proposing to reduce tariff-free quotas for imports to 18.3 million tonnes a year – a 47% reduction from 2024 levels.

The new measures will come into force early next year, but will first need to be approved by the majority of EU member states and the European Parliament.

"We have global over capacity, unfair competition, state aid, and undercutting in prices and we are reacting to that", Stéphane Séjourné, the European Commission's executive vice president for prosperity and industrial strategy.

"Eighteen thousand jobs were lost in the steel sector in 2024. That's too many, and we had to put a stop to that", he told a news conference at the European Parliament in Strasbourg.

The announcement is another blow to the UK steel industry, after a proposed deal to eliminate tariffs on UK steel exports to the US was put on hold indefinitely in September.

Several firms were already in dire financial straits.

The government took control of Chinese-owned plants in Scunthorpe earlier this year, while Liberty Steel plants in Rotherham and Stocksbridge collapsed into government control last month.

Speaking on his way to India on Tuesday, the prime minister said there would be "strong support" from the government for the British steel industry, which could be severely impacted by EU tariffs.

"I'll be able to tell you more in due course, but we are in discussions as you'd expect", Sir Keir Starmer said, refusing to go into the details of any discussion, including whether the UK was seeking exemptions from the rules.

Responding to the announcement, the director general of UK Steel, Gareth Stace, said the government "must go all out to leverage our trading relationship with the European Union to secure UK country quotas or potentially face disaster".

The move by the European Union is partly a response to US President Donald Trump, who sharply raised tariffs on foreign steel earlier this year, citing concern about China and has pushed other countries to take similar steps.

Canada, Mexico and Brazil have also moved to increase protections for domestic steelmakers, responding to concerns about those firms losing business in the US while facing increased competition at home from shipments shifting from America.

Mr Stace cautioned now against the EU's measures "redirecting millions of tonnes of steel towards the UK", something which could be "terminal for many of our remaining steel companies".

The Community Union, representing UK steelworkers, called the measures an "existential threat" to the industry.

Asked about UK concerns, European trade commissioner Maros Sefcovic said at a press conference that he expected to "fully engage" with the UK on this issue, suggesting that a specific UK quota might be negotiated in the future.

In a statement, the Department for Business said it was "pushing the European Commission for urgent clarification of the impact of this move on the UK".

"It's vital we protect trade flows between the UK and EU and we will work with our closest allies to address global challenges rather than adding to our industries' woes", Industry Minister Chris McDonald said.

"This government has shown its commitment to our steel industry by securing preferential access to the US market for our exporters, and we continue to explore stronger trade measures to protect UK steel producers from unfair behaviours."

The government said the industry minister will meet steel representatives on Thursday to discuss their concerns.

Kathleen Van Brempt, vice-chair of the European Parliament's committee on global trade, said she will advocate for the UK in the coming days, adding "the UK for us is a very close ally".

A big blow

Liam Bates is UK managing director at Marcegaglia in Sheffield, which makes stainless steel products and exports to the EU. He said the announcement was a "big blow".

"It must be amongst the biggest challenges we've faced for a very long time. Now the big question is on the detail. Will there be any deal done by the UK government to soften the blow?"

"We have no tariffs on Europe themselves, so you would expect some reciprocity on that, so that we are not treated in the same way. That's the detail we're hoping the government should work towards", he said.

In the meantime, he said future trade with EU customers is a concern.

"We have good relationships with our customers, and we will be communicating with them, but it puts a strain on our business immediately."

"Our customers are in there for the long term, and so there will be a question over whether there's a long-term relationship that can still be had in the face of these quotas."