The steel industry in the UK once warns of 'biggest crisis' as rates of the EU walks

The decision of the European Union to increase steel rates and to sharpen the import quota sharply caused a widespread concern in the UK, as well as rumors of dissatisfaction among car manufacturers on the continent.

The BLOC announced on Tuesday plans to propose tariff-free quota on imported steel-to propose a reduction of 47% compared to 2024 steel quotas to increase rates of 25% to 50% on all excess entry.

The European Commission said that the measures were a response to calls from employees, industry and various Member States “to offer strong and permanent protection to the EU steel industry, with a view to protecting EU jobs and supporting the sector in the efforts of carbon books.” The proposal will replace the steel security measure, which has been set to expire by June 2026.

The rate increase caused an immediate protest in the UK, with the besieged steel industry of the country already had a number of bodylessness, including steel works closures, which led to thousands of jobs losses and American rates of 25% on the steel export to the United States.

“This is perhaps the biggest crisis with the British steel industry ever confronted,” said Gareth Stace, director -general of Industrie Body UK Steel, Tuesday.

“The government must go all the way to use our trade relationship with the European Union to secure the British national quotas or possibly get a disaster,” he added.

Emily Sawicz, director and industrial senior analyst at RSM UK, told CNBC that the EU announcement was an “important threat” for the VK steel industry.

“The EU accounts for around 80% of British steel exports, so these rates run the risk of cutting access to the largest and most strategically important VK market at a time when the sector is already under enormous pressure of global competition and rising energy costs,” she told CNBC's “Europe Early Edition” on Wednesday.

The movement of the block follows similar rates for foreign steel imposed by the US and Canada in an attempt to steal cheaper import – largely from China – which they say will damage their domestic steel industry.

US President Donald Trump increased the rate for the most of the steel and aluminum imports from 25% to 50% this year, while Canada strengthened the import limits and introduced a 25% surtax on steel imports that were originally melted and cast in China.

China rejects accusations that the excess cheap steel has dumped on the world market.

The EU noted on Tuesday that “steel overcapacity is a worldwide problem that requires strong, real and joint action by all partners.”

Rates have been promoted as a way to protect the national steel industry, but sectors that depend on the raw material – in particular the car – industry – have baulked against quotas and rates.

The UK is likely to seek an exemption from the EU and can worry that Norway, Iceland and Liechtenstein are not subject to the steel rate quotas or duties of the EU because they are in the European Economic Area (honor).

The committee also meant the willingness to release Ukraine from the tasks, and noted: “Interests of a candidate country that is confronted with an exceptional and immediate safety situation, such as Ukraine, must also be reflected in determining the quota allocations, without undermining the effectiveness of the measure.”

The UK is not in the honor, but is a narrow trading partner and ally of the EU. Prime Minister Keir Starmer said, after the news about the tariff walk broke, the government had discussions with both the EU and the US about steel rates.

Metaling measures may not have been off the table, with the British Minister of Industry Chris McDonald notices: “We will continue to investigate stronger trade measures to protect British steel producers against unfair behavior.”

He added that “it is vital that we protect trade flows between the UK and the EU and we will collaborate with our closest allies to meet worldwide challenges.

The EU announcement was not well received in all corners of the continent, whereby the European Automobile Manufacturers' Association (ACA) said that the measures can threaten the domestic car industry.

The car was noted that European car manufacturers have around 90% of their direct steel purchases in the EU and that they are “most worried” about the inflationary impact that the limitations will have on European market prices.

“The dramatic reduction of quotas and the doubling of the out-of-quota rate to 50%will significantly reduce the possibility of alleviating pressure on the European market due to import,” the ACEA said in a press release.

Moreover, it said that a new rule of origin based on the “Melt and Pour” principle will further limit the input and “will create a huge administrative burden for European users of imported steel products.”

ACEA director-General Sigrid de Vries said that the body recognized the necessity of a certain level of protection for the steel sector, but added: “We believe that the parameters as proposed by the committee will be far in the Ring of the European Market. We must find a better balance between the needs of European producers and users of Staal in this measure.”