The European Commission has just announced proposals to increase tariffs on imported steel. This decision can only be viewed as a savage blow to the UK steel industry. Pavley’s ban will begin early next year. The proposal notably seeks to reduce the importation of steel into the European Union by 50%. The new measures call for a massive 50% tariff on steel imports. This will place additional, unnecessary stress on a sector that is already being disproportionately impacted.
The new tariffs would not come into effect until a majority of EU member states and the European Parliament approve them. Approval from each group is critical for progress to continue. The response from the UK’s steel industry has been fierce. Unchecked, they say these trends will contribute to “maybe the greatest disaster” in their almost 230-year history. The announcement is another blow for the UK steel industry. This industry is already facing enough challenges, not least the recent indefinite delay of a proposed agreement between the UK and United States to remove tariffs on UK steel exports to the US, confirmed in September.
Concerned by the potential ramifications of the EU’s plans, industry leaders have come out in strong opposition to the proposals. Gareth Stace, Director General of UK Steel, emphasized the urgency of the situation, stating that the industry “must go all out to leverage our trading relationship with the European Union to secure UK country quotas or potentially face disaster.” He highlighted that without intervention, the new tariffs could serve as a “terminal for many of our remaining steel companies,” as they struggle to compete with cheap imports from nations like China and Turkey.
Stéphane Séjourné, the European Commission’s executive vice president for prosperity and industrial strategy, has vigorously defended the decision. He added that the commission is trying to address the global steel overcapacity and unfair competition in the market.
“We have global overcapacity, unfair competition, state aid, and undercutting in prices and we are reacting to that.” – Stéphane Séjourné
Over the last year, the UK government has repeatedly stated its support of the domestic steel industry during this tumultuous period. Chris McDonald, UK industry minister, insisted that ensuring the free flow of trade between the UK and EU was absolutely critical. He affirmed the government’s commitment to work closely with allies to tackle global challenges without exacerbating issues faced by local industries.
“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.” – Industry Minister Chris McDonald
As discussions continue at various levels of government and industry, Labour leader Sir Keir Starmer has indicated his involvement in negotiations regarding this pressing issue.
“I’ll be able to tell you more in due course, but we are in discussions as you’d expect.” – Sir Keir Starmer
The EU’s announcement puts the United States in an economic bind. In doing so, it raises fears for the future of the UK’s trade relationship with Europe. This failure to act could have long term consequences. That’s important for an industry that’s so integral to the UK’s manufacturing base.