The European Union could impose tariffs of 50% on UK steel in a major post-Brexit blow to Sir Keir Starmer months after the sector was hammered by higher levies on exports to the US. Brussels is reportedly planning to slap huge tariffs on all steel imports from outside the European Union (EU) when the number exceeds a quota level set in 2013. The move, designed to prevent cheap Asian steel from dominating markets in the bloc, could have serious consequences for the UK, where some 78% of steel exports currently go to the EU.
It comes just months after US President Donald Trump imposed levies of 25% on UK steel, piling pressure on the sector which is already struggling under high energy costs, the expensive transition to greener processes and competition from cheaper imports. It also follows the Prime Minister’s attempt to butter up the EU by making concessions on youth migration and fishing in May, ostensibly paving the way for closer ties with the bloc.
The EU will impose tariffs of up to 50% on steel imports from countries around the world once the 2013 quota is reached, the Financial Times reports.
Gareth Stace, director-general of the lobby group UK Steel, said the levies could wipe out the country’s remaining steel companies and also warned of the prospect of imports cut off from the EU flooding UK markets.
“This is perhaps the biggest crisis the UK steel industry has ever faced,” he said. “Government must go all out to leverage our trading relationship with the European Union to secure UK country quotas or potentially face disaster.”
The EU tariffs have the potential to unleash existential damage on the industry, significantly worse than the impact of Mr Starmer’s failure to secure a zero-tariff deal with the US, insiders speculated. “This risks being Trump on steriods,” one said.
The change would mark a shift from the existing 25% tariff on UK steel entering the EU and will need to be backed by a weighted majority of member states and the European Parliament before it is approved.
“We are deeply concerned by reports that the European Commission is considering significant reductions to steel safeguard quotas,” Lisa Coulson, chief commercial officer of British Steel, told Politico.
“Such measures would risk shutting British producers out of our largest export market at a time when the sector is already contending with 25% tariffs in the United States,” she added.
The UK government is set to publish its steel strategy later this year, in a bid to map out a viable future for the industry.
A government spokesperson said: “We continue to work closely with EU partners as we await the full details of these plans and their impact on UK businesses. The government will continue to fully back the British steel industry – protecting skilled jobs and supporting economic growth as part of our Plan for Change.
“That is why we have committed up to £3.5 billion of investment to rebuild the industry and are exploring stronger trade measures to protect UK steel producers from unfair behaviours.”