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The UK government on Tuesday pledged to defend Britain’s steel industry from “unfair behaviours” after the EU threatened to slap countries with 50 per cent tariffs.
In a move that threatens to reignite tensions between Brussels and London, the European Commission said it would increase its global tariff rate on steel imported into the bloc from 25 to 50 per cent as well as cutting the amount that can be imported tax free.
Chris McDonald, UK industry minister, said he was “seeking urgent clarification of the impact of this move on the UK” and hinted at a possible retaliation if the EU pressed ahead with the tariff plan.
“We continue to explore stronger trade measures to protect UK steel producers from unfair behaviours,” he said.
Sir Keir Starmer told journalists en route to India that the UK was talking to both Brussels and Donald Trump’s administration about steel tariffs.
“We are in discussions with the EU about this, as we’re in discussions with the US about it,” the prime minister said. “So I’ll be able to tell you more in due course but we are in discussions as you’d expect.”
The threat of fresh tariffs will squeeze an industry already 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.
Around 80 per cent of the UK’s steel exports go to Europe, more than the US, indicating that the tariffs will be more damaging than the 25 per cent imposed by the US under Trump. There is also the risk that low-cost steel will be dumped in the UK, further undermining supplies.
UK Steel, the trade body, urged the government to negotiate “special treatment” for the UK and to press ahead with its own measures to tighten UK import quotas.
It warned the proposal set out by the commission would slash the bloc’s existing tariff-free import quotas by nearly a half to around 18 million tonnes a year, while the out-of-quota tariff would be doubled to 50 per cent.
This would return EU import volumes to levels last seen in 2013, more than a third lower than the 2024 import volume of 27.4 million tonnes.
The UK exported 1.9mn tonnes of steel to the EU in 2024, the vast majority tariff-free under quota arrangements agreed with Brussels.
Industry experts said the radical shrinking of the EU’s quotas now risked large amounts of UK steel attracting tariffs as countries sought to negotiate reduced quotas under the new arrangement.
Gareth Stace, director-general at UK Steel, said the “government must now recognise the urgent need to put in place its own measures to defend against a flood of imports”.
He added: “The probability of the EU’s measures redirecting millions of tonnes of steel towards the UK could be terminal for many of our remaining steel companies.”
Brussels is moving to rescue its shrinking industry from a surge in imports, risking damage to neighbours such as the UK and Switzerland.
“A strong, decarbonised steel sector is vital for the European Union’s competitiveness, economic security and strategic autonomy. Global overcapacity is damaging our industry. We need to act now,” said Ursula von der Leyen, commission president, on Tuesday.