EU proposes steel tariff cuts: UK steel industry could face major supply chain disruption

“The European Commission has outlined plans to halve the volume of steel that can be imported into the European Union (EU) without tariffs. This is a move that could have significant consequences for the United Kingdom (UK) steel industry. Under the new proposal, a 50% tariff would apply to any imports exceeding the new reduced quota limit.

“Currently, the EU is the UK’s most critical export destination for steel, accounting for nearly £3 billion annually, which is around 78% of all UK steel exports. The reduction in tariff-free quotas to 18.3 million tonnes per year represents a 47% cut from 2024 levels.

“The Commission’s decision comes amid mounting pressure from several EU member states and their domestic steel industries, which are struggling to remain competitive against a surge of cheaper imports from countries such as China and Türkiye.

“The proposed tariffs could be expected to significantly disrupt existing supply chains if they are implemented, with consequences such as:

• Increased costs: Businesses that rely on steel products will likely face higher input costs, threatening profitability and operational efficiency.
• Supply chain delays: Companies may experience delays if they restructure procurement and logistics to adapt to the new rules.
• Inflationary pressure: Higher steel prices and logistical complications could contribute to broader inflation, impacting both industry and consumers.

“As the UK approaches the Autumn Budget, the news will bring serious concern to thousands of families whose livelihoods depend on the steel industry. Businesses are advised to begin reviewing sourcing strategies, renegotiating freight and supply contracts, and preparing for cost volatility in the months ahead. Staying informed and agile will be critical to mitigating the potential negative effects of these EU measures on the UK steel sector and its wider supply chain economy.”