UK might face new crisis over steel tariff hike

(MENAFN) The European Union has unveiled plans to halve steel import quotas and impose 50% tariffs on volumes exceeding the new limit — a move that UK industry leaders warn could spark the worst crisis in Britain’s steel sector in decades.

Under the proposal, the EU will reduce tariff-free quotas for steel imports to 18.3 million tonnes a year, a 47% cut from 2024 levels. The new measures are aimed at protecting the bloc’s struggling steel producers from cheap imports from countries such as China and Turkey, and will require approval from EU member states and the European Parliament before taking effect early next year.

“We have global overcapacity, unfair competition, state aid, and undercutting in prices — and we are reacting to that,”

said 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.”

The EU remains the UK’s largest steel export market, accounting for 78% of overseas sales worth nearly $4 billion annually. The new restrictions, if implemented, could devastate British mills already on the brink.

Gareth Stace, director general of UK Steel, warned that the government must “go all out” to secure country-specific quotas or face potential collapse:
“The government must leverage our trading relationship with the EU to secure UK quotas or potentially face disaster.”
The Community Union, representing thousands of steelworkers, called the EU’s measures an “existential threat” to the industry.

Several UK steel firms are already under state control following financial collapses. The government took over Chinese-owned plants in Scunthorpe earlier this year, while Liberty Steel sites in Rotherham and Stocksbridge entered administration last month.

Speaking en route to India, Prime Minister Sir Keir Starmer pledged that the government would provide “strong support” for the industry, though he declined to offer details on negotiations with Brussels.

“We are in discussions, as you’d expect,” he said, without confirming whether the UK would seek exemptions.

Industry Minister Chris McDonald said the government was demanding “urgent clarification” from the European Commission on the tariffs’ impact, emphasizing that it was “vital to protect trade flows between the UK and EU.”

The EU’s move follows US President Donald Trump’s decision earlier this year to sharply raise tariffs on foreign steel, citing unfair competition from China. Other countries, including Canada, Mexico, and Brazil, have since introduced their own protective measures to prevent cheap steel diverted from the US market flooding their domestic industries.

Mr. Stace warned that the EU’s new limits could similarly cause “millions of tonnes of steel” to be redirected toward the UK, potentially “terminal for many of our remaining steel companies.”

European Trade Commissioner Maros Šefčovič said the EU was ready to “fully engage” with the UK and suggested a specific quota arrangement could be discussed to mitigate the impact.

Meanwhile, Kathleen Van Brempt, vice-chair of the European Parliament’s Committee on Global Trade, signaled that some in Brussels were sympathetic to British concerns.

“The UK for us is a very close ally,” she said. “I will advocate for a fair outcome.”

The UK government is set to meet with industry representatives on Thursday to discuss emergency measures as the country’s century-old steel sector braces for what experts warn could be its “biggest ever crisis.”

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