Proposals for 50 per cent tariffs on all steel sold into the EU would land a fresh blow on British industry
Post-Brexit trade tensions are at risk of being blown open again after the EU announced sweeping steel tariffs which would have a “devastating” impact on British industry.
Proposals for 50 per cent tariffs on all steel sold into the EU would land a fresh blow on the sector, which is already suffering due to the US refusing to scrap its own import levies.
Industry figures warned British steelmaking could be decimated without exemptions from the EU.
There is also uncertainty among UK officials as to whether the measures would be in breach of the UK-EU post-Brexit trade agreement.
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Prime Minister Sir Keir Starmer hinted he was pushing for exemptions for the UK, under its trade agreement with the EU.
Speaking to journalists on the way to India, where the UK is leading a trade delegation, Starmer said: “I think our position in relation to our steel industry is one of strong support as you saw from Scunthorpe and Port Talbot.
“In relation to the question of tariffs or other measures, as you’d expect, we are in discussions with the EU about this, as we’re in discussions with the US about it. So I’ll be able to tell you more in due course but we are in discussions as you’d expect.”
Pressed on whether he is seeking exemptions from the tariffs, Starmer added: “I’m not going to go into the details, but I’m going to tell you in clear terms as you would expect we are discussing this with the EU and with the US.”
The new import regime, proposed by the EU to replace the current system on 30 June, 2026, would cut the tariff-free import quota by almost 50 per cent, from 33 million tonnes to 18.3m.
Outside of this quota, tariffs of 50 per cent will be slapped on all third countries not inside the European Economic Area.
The bloc said the proposals, which are yet to be approved by the European Parliament, will be compatible under trade rules.
UK seeking ‘urgent clarification’
But the UK Government said it is seeking “urgent clarification” as to the impact it would have on Britain and how it would interact with the Trade and Cooperation Agreement, signed as part of the Brexit deal.
This agrees that all goods imported from the UK to the EU, and vice versa, remain tariff free.
The government said it was keeping all options under review to defend the steel industry. It would not be drawn on any potential action it could take.
With 80 per cent of all UK-made steel exported to Europe, the measures could wipe out the British industry.
Director General of UK Steel Gareth Stace told Times Radio the imposition of such tariffs would be “devastating” on British industry.
He added: “If the UK government can’t get round the table with the EU and convince the EU that we’re their friend, not their enemy and then carve out a reasonable quota for UK exports into the EU, then we will see job losses in our sector. The like we haven’t seen for a number of years.”
Without intervention from the UK government the sector would “become unsustainable,” Stace said.
Alasdair McDiarmid, Assistant General Secretary at steelworkers’ union Community, said the measures posed “an existential threat to our industry, as well as the thousands of jobs and communities it supports right across the country”.
Ministers must “move swiftly to negotiate preferential treatment for the UK, including through country-specific quotas,” he said.
And GMB Union said the EU is the UK’s “main export market” and warned failure to carve out an exemption of sorts could lead to “the end of steel making in the UK”.
The impact may not be negative in all sectors, with the National Federation of Builders (NFB) suggesting the tariffs could spark a drop in build costs for some housing projects.
‘Vital to protect trade’
“If these tariffs go ahead, non-EU steel manufacturers will likely target the UK market, which could help bring down the build costs of high-rise projects and steel frame houses, which housebuilders are increasingly showing an interest in,” said Rico Wojtulewicz, NFB’s head of policy and market insight.
However, a weakened domestic steel industry could still spell long-term trouble.
Wojtulewicz added: “This benefit may be temporary, because in the long term a weaker UK steel industry will make us more reliant on imports and so expose us to climate policies such as the Carbon Border Adjustment Mechanism (CBAM), which have their own permanent tariff on imported materials.”
UK Industry Minister Chris McDonald is due to meet with steel representatives on Thursday to discuss the announcement.
Responding to the news from the European Commission, he said he 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,” he added.
“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 steel industry has already faced the blow of 25 per cent tariffs imposed by US President Donald Trump after failed attempts by Prime Minister Sir Keir Starmer to reduce the levies to zero.
The UK has benefitted from a more favourable tariff regime than other trading partners of the US, which faced 50 per cent levies, but efforts to lobby Trump to scrap them entirely have so far fallen short.
According to UK steel, the EU was the UK’s top destination for steel exports last year, taking 78 per cent (some 1.9 million tonnes) compared to the seven per cent directed to the United States.
And Britain is a major importer of steel from the bloc, with 3.65 million tonnes of steel exported from the EU to the UK in 2024.
So far this year the UK has overtaken the US as Europe’s main export market due to the 50 per cent tariff imposed by America on EU exports.