The European Union’s plan to hike tariffs on metal imported over and above its annual threshold may tip the UK’s metal business into its worst disaster in historical past, business leaders have warned.
On Tuesday, the European Fee proposed that the 27-member bloc would slash its tariff-free metal import quota by 47 % to 18.3 million tonnes and would impose a tariff of fifty % on any metal imported in extra of this quantity.
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This represents a pointy hike: The EU’s present annual metal import quota stands at 33 million tonnes, and imports above this restrict are topic to a 25 % tariff.
The announcement has rattled the British metal business, which exports practically 80 % of its metal to the EU.
“That is maybe the largest disaster the UK metal business has ever confronted,” Gareth Stace, director basic of the foyer group UK Metal, mentioned on Tuesday. He described the transfer as a “catastrophe” for British metal.
Neighborhood, a commerce union representing UK steelworkers, mentioned the EU’s proposal represents an “existential risk” to the UK metal business.
Right here’s what we all know in regards to the EU’s new levies and why the UK is fearful:
Why has the EU introduced a tariff hike for metal imports?
The brand new tariff is anticipated to return into impact from June 2026, so long as EU international locations and the European Parliament approve it.
The EU says it has no selection however to usher in the brand new tariff because it seeks to guard its personal markets from a flood of subsidised Asian metal, which has been diverted by US President Donald Trump’s newest 50 percent tariff on all metal imports to the US.
The EU additionally desires to guard its metal sector from the problem of worldwide overcapacity.
In a speech on the European Parliament in Strasbourg on Tuesday, the European Commissioner for Commerce and Financial Safety, Maros Sefcovic, defended the bloc’s metal tariffs proposal as a transfer to “defend the bloc’s very important sector” whose metal commerce steadiness has “deteriorated dramatically”.
Sefcovic added that greater than 30,000 jobs have been misplaced since 2018 within the EU’s metal business, which employs about 300,000 individuals general.
Whereas the business is ailing, he mentioned, different international locations have begun imposing tariffs and different safeguards to make sure their very own home metal industries develop. The Fee’s proposal, due to this fact, seeks to “restore steadiness to the EU metal market”.
Extra succinctly, a senior EU official advised The Occasions newspaper: “My pricey UK buddies, it’s a must to perceive that we have now no selection however to restrict the whole volumes of imports that come into the EU, so that is the logic that we apply clearly. Not performing may end in doubtlessly deadly results for us.”
The EC’s proposal comes because the bloc’s metal sector faces stiff competitors from international locations like China, the place metal manufacturing is closely subsidised.
China produced greater than a billion metric tonnes of metal final yr, adopted by India, at 149 million metric tonnes, and Japan, at 84 million metric tonnes, based on the World Metal Affiliation, a nonprofit organisation with headquarters in Brussels.
By comparability, mentioned Sefcovic, the EU produces 126 million tonnes per yr however solely requires 67 % of this for its personal use – “properly beneath the wholesome 80 % benchmark and beneath worthwhile ranges”.
Furthermore, metal manufacturing throughout the EU has declined by 65 million tonnes per yr since 2007 – with practically half of that misplaced since 2018.
“A powerful, decarbonised metal sector is significant for the European Union’s competitiveness, financial safety and strategic autonomy. World overcapacity is damaging our business,” EC President Ursula von der Leyen mentioned.
The Fee’s business chief, Stephane Sejourne, advised reporters in Strasbourg that “the European metal business was on the breaking point” and mentioned that by the tariffs plan, the Fee is “defending it [EU’s steel industry] in order that it may make investments, decarbonise and develop into aggressive once more”.
Sejourne added that the Fee’s plan is “according to our [EU] values and worldwide legislation”.
Why would the UK bear the brunt of EU metal tariffs?
The EU is the UK’s largest marketplace for metal exports by far. In 2024, the UK exported 1.9 million metric tonnes of metal, price about 3 billion kilos ($4.02bn) and representing 78 % of its home-made metal merchandise to the EU.
Whereas the EC’s metal tariffs proposal doesn’t apply to members of the European Financial Space, particularly Norway and Iceland, it can apply to the UK and Switzerland. Ukraine will even be exempt from the tariff quota since it’s going through “an distinctive and instant safety scenario”, based on the EC.
The EU says it’s open to negotiations with the UK as soon as it has formally notified the World Commerce Group (WTO) of the brand new levy. For now, nevertheless, uncertainty looms.
Compounding this, the UK additionally fears being flooded by cheaper, subsidised metal from Asia as each the EU and US markets shut their doorways to it.
In a press release, UK Metal added: “The potential for hundreds of thousands of tonnes that might be barred from the EU market, to be redirected in the direction of the UK is one other existential risk.”
Nicolai von Ondarza, an affiliate fellow at Chatham Home, the London-based coverage institute, advised Al Jazeera that low-cost metal diverted by the EU’s deliberate tariffs will largely come from international locations like China, “placing further stress on its business”.
The British metal sector can also be shouldering Trump’s 25 % tariff on British metal imports, a world provide glut, and better vitality costs, and has been embattled by job losses in a few of its greatest steelworks as a consequence of inexperienced transition initiatives.
Can the UK negotiate its means out of this?
That’s at the moment its greatest hope, based on business leaders.
“We might urge the UK and EU to start pressing negotiations and do every part attainable to stop the crushing impression these proposals would have on our metal business,” he added.
Chatham Home’s Ondarza advised Al Jazeera: “For the UK, the primary route is to attempt to negotiate a carve-out of those EU tariffs. Each the EC and the UK have already signalled willingness to speak. These negotiations are prone to be tough, however not unlikely that they arrive to an settlement.”
On his means for a two-day enterprise journey to India, UK Prime Minister Keir Starmer advised reporters that his nation is “in discussions with the EU” in regards to the proposal.
“I’ll have the ability to let you know extra sooner or later, however we’re in discussions, as you’d count on,” he mentioned.
In the meantime, Chris McDonald, the UK business minister, has recommended that retaliatory measures is probably not fully off the desk.
“We proceed to discover stronger commerce measures to guard UK metal producers from unfair behaviours,” he advised reporters.
If the US triggered this, can it assist to resolve it?
Whereas the EU’s tariffs proposal has led to an outcry within the UK, it is usually a measure which seeks to deliver the US to the negotiating desk, the EC says.
In August, the EU and US agreed a commerce deal underneath which Washington will levy 15 % tariffs on 70 % of Europe’s exports to the nation. Brussels and Washington have but to debate how tariffs would apply to European metal, which nonetheless faces a 50 % tariff underneath Trump’s new commerce regime.
Sefcovic advised reporters the Fee’s metal tariffs proposal can be an excellent basis to interact with the US and in addition battle the problem of overcapacity as “like-minded companions”.
