Keir Starmer promised a new era of relations with the EU (Image: Getty)
Keir Starmer was branded “a total failure” as the European Union threatened 80,000 British jobs with plans for a massive tariff on steel. The Prime Minister proudly hailed a new deal with the EU in May, saying his so-called Brexit reset would “get the best for the British people”
But the claim lies in tatters today after the European Commission revealed plans to impose 50% tariffs on steel, double the current level of 25%, while cutting almost by half the amount of steel that can be sold without a tariff. The UK steel sector directly employs 33,700 people, and a further 42,000 work in the wider supply chain. But Gareth Stace, director-general at trade body UK Steel, said the EU betrayal was “perhaps the biggest crisis the UK steel industry has ever faced”.
Alasdair McDiarmid, assistant general secretary at the Community trade union, said: “Given that around 80% of the UK’s steel exports go to Europe, the new measures proposed by the EU represent an existential threat to our industry, as well as the thousands of jobs and communities it supports right across the country.”
Conservatives slammed Sir Keir for failing to keep his promises. Andrew Griffith MP, Shadow Business and Trade Secretary, said: “The government has no proper plan for steel. The threat of crippling 50 per cent EU tariffs is yet more evidence that Keir Starmer has totally failed the industry.
“He pledged to ‘give UK steel its future back’ and keep tariffs down. Instead, steel workers have been hung out to dry on the international stage, while facing higher costs at home thanks to Labour’s tax grabs and overregulation.
“Labour have broken every promise, betraying an industry that is so vital to our security. Ministers are flailing as that industry threatens to collapse around them.”
And Sir Keir’s union allies demanded he act now. Unite general secretary Sharon Graham said: “UK steel must be backed for the long term, the current piecemeal approach to our steel industry isn’t working.
“Without delay the UK must introduce strict rules to ensure that all UK infrastructure developments and all public sector projects must use domestically produced steel.
“This must be the first step in protecting a foundation industry which is critical for the economic success of our nation and vital for our national security.”
The EU tariff hike will come on top of new tariffs in the US levied by Donald Trump, which have already left the industry reeling.
The Prime Minister insisted his Government is “in discussions” with the European Union. As he travelled to India on a trade mission, Sir Keir said: “I think our position in relation to our steel industry is one of strong support as you saw from Scunthorpe and Port Talbot.
“In relation to the question of tariffs or other measures, as you’d expect, we are in discussions with the EU about this, as we’re in discussions with the US about it.
“So I’ll be able to tell you more in due course but we are in discussions, as you’d expect.”
Pressed on whether the UK was seeking exemptions, the Prime Minister said he would not go into details but that discussions were taking place with the EU and the US.
European Commission president Ursula von der Leyen said global overcapacity is damaging industry, adding that officials “need to act now”.
The commission has been under pressure from some member states which have struggled to compete with cheap imports from countries such as China.
The plan, which was presented to the European Parliament on Tuesday, is also intended to strengthen the traceability of steel.
It would replace the current steel safeguard measure, which is due to expire in June 2026.
The UK Steel trade association warned that access to Britain’s most important export market, which is currently the destination for 78% of British steel, could be “severely curtailed” by the move.
It called for the Government to negotiate preferential treatment for the UK and for Britain to have its own import quotas.
Industry leaders warned that time is running short for negotiations, arguing that prolonged uncertainty could discourage investment and place additional pressure on manufacturers already facing high energy costs and increased international competition. Several steel producers said they were closely monitoring discussions between London and Brussels, with hopes that a negotiated exemption or revised quota system could be secured before the proposed measures take effect.
Business groups have also urged ministers to accelerate the development of a long-term industrial strategy designed to improve the competitiveness of UK steelmakers. Among the measures frequently proposed are lower industrial electricity prices, increased investment in low-carbon steel production, support for modernisation projects and stronger procurement rules favouring domestically produced steel for major infrastructure schemes.
Analysts noted that the European Union’s proposed safeguard changes are part of a broader effort to address global steel overcapacity. European manufacturers have argued that excess production in international markets, particularly from low-cost exporters, has distorted competition and placed significant pressure on producers across the continent. Brussels has said the revised measures are intended to prevent sudden surges in imports while maintaining the stability of the European steel market.
However, UK exporters fear that, despite the post-Brexit trade agreement, they could be caught by rules designed primarily to address imports from other regions. Industry representatives argue that British steel has traditionally supplied European customers through established commercial relationships and should not be treated in the same way as imports from countries associated with significant excess production.
The issue has also prompted renewed debate in Westminster over the future of British manufacturing. MPs from steel-producing constituencies have called for urgent engagement with both industry and international partners, warning that any disruption to exports could have serious consequences for communities where steel production remains a major source of employment.
Economists have suggested that the proposed tariffs, if implemented without exemptions or revised quotas, could increase costs for exporters and reduce the competitiveness of British products in European markets. Some companies may seek alternative export destinations, although industry experts caution that replacing the EU market would be challenging given its size and proximity.
Trade specialists also pointed out that the steel sector is facing pressure from multiple directions. Alongside trade barriers, manufacturers continue to contend with fluctuating raw material costs, investment requirements linked to decarbonisation and growing international competition. Many argue that these combined challenges require coordinated policy responses rather than short-term interventions.
The Government has reiterated that discussions with the European Union are ongoing and that it remains committed to supporting the steel industry. Ministers have indicated that they are seeking a solution that protects British exports while preserving wider trade relations with European partners.
Meanwhile, European officials have defended the proposed safeguards as necessary to protect producers within the bloc from market distortions caused by global oversupply. The European Commission has indicated that consultations with member states and affected trading partners will continue before the new regime is finalised.
With the current safeguard system due to expire in 2026, both industry representatives and policymakers acknowledge that the coming months will be critical. Manufacturers, unions and trade bodies are expected to continue pressing for a negotiated outcome that maintains access to one of the UK’s largest export markets while providing greater certainty for businesses planning future investment.
As negotiations continue, the outcome is likely to be closely watched by manufacturers, investors and workers across the sector, with many viewing the discussions as an important test of the UK’s ability to secure favourable trading conditions for strategically significant industries in the years following Brexit.