UK steel industry warns of ‘biggest crisis’ due to new EU tariffs
European Commission set to propose a levy of 50% on steel imports
The UK steel industry is facing its “biggest crisis” in history, the sector’s trade body has warned, as the EU prepares to impose steep tariffs that could be more devastating than those levied by the US.
The European Commission intends to propose tariffs of 50 per cent on steel imports worldwide above a quota set at 2013 levels on Tuesday, according to a document obtained by the Financial Times.
The move threatens to inflict disproportionate damage on the UK steel industry, from which 80 per cent of exports go to Europe. Steel imports squeezed out of the EU could also flood the UK.
Gareth Stace, director-general of industry lobby group UK Steel, warned that the new tariffs “could be terminal for many of our remaining steel companies”, urging ministers to “recognise the urgent need to put in place its own measures to defend against a flood of imports”.
“This is perhaps the biggest crisis the UK steel industry has ever faced. Government must go all out to leverage our trading relationship with the European Union to secure UK country quotas or potentially face disaster,” he said.
The tariffs pile pressure on an industry struggling under the weight of high energy prices, global overcapacity caused by a glut of Chinese steel and the investment needed to decarbonise steel production.
The industry is already grappling with 25 per cent levies imposed by US President Donald Trump after the Labour government failed to secure a promised zero tariff deal.
But a far greater proportion of British steel is sold to Europe than to America. “This risks being Trump on steroids,” said one industry figure.
The new import taxes represent a fresh blow to a sector already in dire straits with the government forced to step in earlier this year to take control of British Steel from its previous Chinese owner Jingye.
Steel producers are pressing the government to use its long awaited steel strategy, expected this autumn, to reshape the industry’s future, rather than lurching from crisis to crisis.
Under the EU’s proposals, countries will be given specific quotas, as will product categories. The EU industry has also been struggling to compete with cheap imports from China, Turkey, Vietnam and elsewhere.
The EU steel sector announced 18,000 job cuts in 2024, adding to the 90,000 job losses since 2008, industry lobby Eurofer said.
“There is no other way to ensure the long-term protection of the steel industry,” said one EU official. “If not, we are going to find ourselves without a steel industry.”
Liam Bates, president of long products at Marcegaglia, which has two stainless producing plants in the UK, said the move was no surprise given the pressure from Trump’s tariffs on the EU steel industry.
He added that it would put “huge stress” on its UK business producing rods, which are used in automotive construction and general machinery.
“Coming immediately after the disappointment of not getting zero free tariffs from the US, we are eagerly anticipating the government’s steel strategy and efforts to make electricity prices competitive,” Bates said.
The UK government has put a brave face on the 25 per cent tariff on British steel sales to the US, which is lower than the 50 per cent applied elsewhere.
But Prime Minister Sir Keir Starmer had previously been hoping for a zero per cent US tariff for a quota of British steel exports.
Even before the imposition of the tariffs, the UK sector was in decline, with domestic crude steel production last year falling to just 4mn tonnes — the lowest total since the Great Depression of the 1930s.
Last year, the EU imported 28mn tonnes of steel, a quarter of the total sold in the bloc. Under the proposed new regime, tariff free quotas would cover 18.3mn tonnes.
The EU measure would replace a 25 per cent tariff that is riddled with exemptions and has failed to stop a surge in imports, and must be renewed after five years.
It has to be approved by a weighted majority of member states and the European parliament, a process likely to take until early 2026.