The European Union has ignited a fierce debate across the continent and beyond after unveiling a sweeping proposal to slash its duty-free steel import quotas by nearly half, while doubling tariffs on excess imports—a move that’s sending shockwaves through the global steel industry and rattling the United Kingdom’s already embattled steel sector.
Announced on October 7, 2025, the European Commission’s plan would reduce the annual quota for tariff-free steel and steel products from 30.5 million tonnes to just 18.3 million tonnes. Imports above this threshold would be hit with a 50% tariff, up from the current 25%. According to AP and PTI, the new measures target major exporters such as China, India, Turkey, and the United Kingdom, while neighboring countries like Norway, Iceland, and Ukraine are exempt.
European Commission President Ursula von der Leyen didn’t mince words about the urgency. “A strong, decarbonized steel sector is vital for the European Union’s competitiveness, economic security and strategic autonomy. Global overcapacity is damaging our industry. We need to act now,” she declared, as reported by AP and Euronews. She further emphasized the Commission’s commitment to working with industry, member states, and global partners—including at the World Trade Organization (WTO)—to find long-term solutions to these shared challenges.
At the heart of the proposal is a complex new quota system requiring steel importers to declare where their products were melted and poured—a so-called "melt and pour" rule. The Commission hopes this will close loopholes used by exporters, especially from China, to circumvent EU tariffs by routing steel through other countries. As Euronews notes, Turkey, India, South Korea, Vietnam, and China were the main suppliers of steel to the EU in 2024.
The timing of this proposal is no accident. The EU’s current steel safeguard policy, which aligns with WTO rules, is set to expire in June 2026. With global steel overcapacity ballooning—reaching 600 million tonnes in 2023 and expected to soar past 720 million tonnes by 2026, according to the OECD—the pressure on European producers has become acute. The European Steel Association estimates that this glut is four to five times the EU’s total annual steel consumption.
For Europe’s steelworkers, the pain is already being felt. IndustriAll, the European steel union, reports that 18,000 jobs have been lost in the sector over the past year alone. Judith Kirton-Darling, general secretary for IndustriAll's Europe office, sounded the alarm in September: “Steel is the backbone of Europe’s economy, yet the sector is now at breaking point. That is why trade unionists from every corner of Europe have joined steelmakers at this summit to call for urgent action.”
The Commission’s aim is clear: by reducing duty-free imports and hiking tariffs, the EU hopes to boost its industry’s capacity utilization from the current 67% to around 80%. Stéphane Séjourné, the European Commission’s executive vice president for industrial strategy, was bullish on the plan, proclaiming on X, “This is the new safeguard clause on steel. This is the reindustrialization of Europe.”
But the proposal is not without controversy. While EUROFER, the main lobby for EU steel producers, expressed optimism and noted broad consensus among member states and Members of the European Parliament (MEPs), the final outcome is far from certain. Germany, the EU’s industrial powerhouse and leading car manufacturer, has yet to take a firm position. The Commission, however, is confident, pointing to a consultation in August that showed strong support for protectionist measures from across the bloc.
The plan must still clear several hurdles before becoming law. Both the European Parliament and the Council of the EU must ratify or amend the proposal, and WTO negotiations may follow to assess the impact on member countries. Von der Leyen urged swift action: “I urge the Council and Parliament to move ahead quickly.”
The international ramifications are already being felt, especially in the United Kingdom. More than three-quarters of British steel exports go to the EU, making the bloc by far the UK’s largest customer. UK Steel, the trade body for the sector, minced no words: “This is perhaps the biggest crisis the UK steel industry has ever faced,” warned Director-General Gareth Stace, as cited by AP and PTI. He called on the British government “to go all out to leverage our trading relationship with the European Union to secure UK country quotas or potentially face disaster.”
The risk, Stace noted, is not only the loss of access to the EU market but also the possibility that steel redirected from other countries hit by the new tariffs could flood the UK market, “which could be terminal for many of our remaining steel companies.”
The UK government, for its part, is scrambling to respond. Prime Minister Keir Starmer confirmed, “We are in discussions with the EU about the proposal. I'll be able to tell you more in due course but we are in discussions, as you’d expect.” The stakes are high: the UK’s once-mighty steel industry has shrunk dramatically from its 1970s heyday and now accounts for just 0.1% of the country’s economy. Thousands of jobs are already at risk at the country’s largest steelworks, Port Talbot in Wales, where owner Tata Steel is pursuing a painful restructuring in a bid to make the plant leaner and greener.
Community, a major trade union representing steelworkers, described the EU’s proposal as “an existential threat to our steel industry.” Assistant General Secretary Alasdair McDiarmid urged urgent negotiations, warning, “Global overcapacity is a shared challenge and it is in both the UK and the EU’s interests to work together to find a solution. A trade war, at what is already a turbulent time for the global steel industry, would be incredibly damaging for everyone involved, with workers in the UK and Europe paying the heaviest price.”
Steel manufacturing remains a cornerstone of the European economy, employing around 300,000 people across 20 of the EU’s 27 member states. Yet the sector has lost about a quarter of its workforce over the past two decades, a stark reminder of the mounting pressures from globalization and shifting industrial priorities. The EU itself traces its origins to the 1951 European Steel and Coal Community—a testament to how foundational steel has been to the continent’s postwar identity.
As the EU and US continue to negotiate on steel tariffs and broader trade issues, including at the upcoming G20 trade ministers’ meeting in South Africa, the world will be watching to see whether these new protectionist measures signal a lasting shift in global trade or merely the latest skirmish in an ongoing struggle for industrial survival.
With the fate of thousands of jobs and entire communities hanging in the balance, the coming months could prove decisive for the future of steel on both sides of the Channel—and perhaps, for the global trading system itself.
