EU steel quotas slashed 47%, Threatening British steel exports

The European Union on Tuesday proposed reducing free-trade quotas on steel and steel products by 47%, effectively imposing high tariffs on imports from countries including China, India, Turkey, and the United Kingdom. UK officials warned that the measures could severely damage the British steel industry, which relies heavily on exports to the EU.

Under the new plan, once the EU imports 18.3 million tonnes of steel, additional shipments would face tariffs of up to 50%, a level comparable to measures previously introduced by US President Donald Trump. Neighboring countries such as Norway, Iceland, and Ukraine would be exempt from these tariffs.

Addressing Global Overcapacity

The proposal seeks to strengthen Europe’s traditional steel manufacturers by implementing trade barriers to prevent markets from being flooded with imports redirected due to high American tariffs. Importers would be required to declare clearly where steel products were melted and poured, while a quota system would regulate market access. This policy will replace the current steel safeguard program aligned with World Trade Organization rules, set to expire in June 2026.

European Commission President Ursula von der Leyen emphasized the importance of the sector, saying, “A strong, decarbonized steel sector is vital for the European Union’s competitiveness, economic security, and strategic autonomy. Global overcapacity is damaging our industry.”

The European Parliament and the European Council must now ratify or amend the proposal, which may also require WTO negotiations to assess its impact. In 2024, the EU exported €77 billion (USD 89.7 billion) and imported €73.1 billion (USD 85.2 billion) worth of steel, according to Eurostat. The European Steel Association estimates global overcapacity at around 602 million tonnes—four times the EU’s annual steel consumption.

Impact on the UK

UK Steel warned that the proposed reduction in tariff-free quotas could be disastrous. More than three-quarters of British steel exports go to the EU. UK Steel Director-General Gareth Stace described the proposal as “perhaps the biggest crisis the UK steel industry has ever faced” and urged the government to negotiate quotas with the EU.

Community, a UK steelworkers’ union, described the measures as “an existential threat” and called for urgent negotiations. Assistant General Secretary Alasdair McDiarmid added that a trade war at an already turbulent time for global steel could harm workers in both the UK and EU.

Steel: A Cornerstone of the European Economy

Steel employs roughly 300,000 people across 20 EU nations but has lost a quarter of its workforce over two decades. The sector remains foundational, tracing its origins to the 1951 European Steel and Coal Community. EU Trade Representative Maroš Šefcovic said steel tariffs and quotas would be discussed at the upcoming G20 trade ministers’ meeting in South Africa.