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Tariffs

EU's Steel Tariff Hikes Defended as Whitehall Seeks to Limit Impact on UK Workers

Strategic Insights

— 1 min read

The European Union's ambassador to the UK, Pedro Serrano, has defended planned hikes in steel tariffs as part of a broader effort to protect the EU's steel industry from cut-price imports. The proposed measures include imposing 50% tariffs on steel, doubling the current level of 25%, and cutting tariff-free import volumes to 18.3 million tons a year - a 47% reduction. This move comes as Tata Steel has confirmed it will halt steel production at several of its UK operations for five weeks due to weak orders. Talks between the UK and the EU are expected to cover issues including how much steel the UK will be allowed to export tariff-free into the bloc.

Key Takeaways:

  • The European Commission plans to impose 50% tariffs on steel, double the current level of 25%, and cut tariff-free import volumes to 18.3 million tons a year - a 47% reduction.
  • Tata Steel has confirmed it will halt steel production at its Port Talbot, Trostre, and Llanwern operations for five weeks due to weak orders.
  • The stoppages are far longer than the usual two-week wind down around the festive period, affecting over 1,500 workers.
  • The UK currently imports more steel from the EU than it exports into the single market - around 3.7 million tonnes compared to 1.6 million tonnes exported.
  • UK quotas on imported EU steel don't really apply, as they range from 70% to 140% of domestic demand.
  • The industry believes a tougher UK quota and tariff regime will be needed to prevent a flood of cheaper imports from countries such as China and Vietnam.
  • Gareth Stace, director-general at UK Steel, has described the crisis facing the industry as "perhaps the biggest" the UK steel industry has ever confronted.

Statistics:

  • 50% tariff on steel proposed by the European Commission
  • 25% current tariff on steel
  • 18.3 million tons: proposed tariff-free import volume
  • 47%: reduction in tariff-free import volume compared to current levels
  • 5 weeks: duration of steel production halt at Tata Steel's UK operations
  • 1,500: estimated number of workers affected by the steel production halt
  • 3.7 million tonnes: amount of steel currently imported from the EU
  • 1.6 million tonnes: amount of steel exported by the UK into the EU

Sources:

  • European Commission
  • Pedro Serrano, European Union's ambassador to the UK
  • Gareth Stace, director-general at UK Steel
  • Tata Steel

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