Wales’ Economy Secretary Rebecca Evans has warned of drastic consequences for the future of Welsh steelmaking after the EU announced plans to slash tariff-free import quotas.
Ms Evans pledged to do “everything we can” to influence Ƶ-EU talks over plans to cut the amount of tariff-free steel that can be imported into the bloc by nearly half.
The European Commission has disclosed plans to impose 50% tariffs on steel, double the current level of 25%, while cutting tariff-free import volumes to 18.3 million tons a year – a 47% reduction.
The new tariff would effectively match the levy US President Donald Trump previously imposed on the EU and will come as a further blow to British industry, which has already been hit by levies on steel into the American market.
The Welsh Government said it would continue to work with the Ƶ Government to product the industry as Tata Steel continues its transition to greener steel-making.
In September 2024, the last blast furnace at Tata’s Port Talbot site was shut down, ending decades of primary steel making in the town. Since then it has been confirmed that more than 2,000 people lost their jobs.
The company, with £500m Ƶ Government funding, is moving to steel-making via a new electric arc furnace which is due to open by the end of 2027.
The EU is the Ƶ’s largest steel export market worth nearly £3bn. As well as Tata other significant players in the Welsh sector are Cardiff-based and Czech-owned 7 Steel Ƶ. The operation, which makes steel from scrap, was recently acquired from former Spanish owners Celsa.
The new EU plans were set out following pressure from some member states which have struggled to compete with cheap imports from countries such as China.
Ms Evans told the Senedd: “We’re extremely concerned [about] the EU’s announcement on the new tariff measures, and what they will mean for the steel industry in Wales and the Ƶ.”
She stated Labour ministers are pressing their Westminster counterparts to engage in urgent discussions with the European Commission to ensure Welsh steel is not left behind.
Luke Fletcher, Plaid Cymru’s shadow economy secretary, criticised the “panic-mode” Ƶ Government for being “blindsided” by the announcement.
Mr Fletcher told the chamber: “This really is crunch time for the Welsh steel industry. The EU decision to almost halve tariff-free quotas for imported steel threatens to cut off access to our biggest export market, with industry leaders warning of this perhaps being the biggest crisis the Ƶ steel sector has ever faced.”
Pointing to Labour’s pre-general election promises of a new relationship with Europe and to “move mountains for steel”, he said: “Yet, a year on for Port Talbot, here we are again.”
Mr Fletcher called for action to ensure Welsh plants, such as Port Talbot and Llanwern, are not left to bear the brunt of a tariff war between Brussels and Washington – with the EU’s move widely seen as a response to US tariffs.
“Our steel communities can’t take much more,” he said. “And there’s already a track record from the Labour Ƶ Government of safeguarding steel plants in England.”
Ms Evans replied: “The EU’s proposal clearly has the potential to have drastic consequences for the Welsh steel sector at a time when… it is already under immense trading pressure due to the US tariffs and global overcapacity.”
Labour’s David Rees, who represents the Senedd’s cross-party group on steel, urged Welsh ministers to press the case with European partners as well as Ƶ ministers.
The Aberavon Senedd member called for Wales to have a voice in negotiations to protect the country’s interests in securing a tariff-free quota and reduced tariffs for Ƶ steel.
Ms Evans agreed that whatever emerges must work well for Wales as well as the Ƶ. She pledged: “We’ll do everything we can to have the most influence we can in those discussions, setting out exactly how important this is to Wales.”
Samuel Kurtz, the Conservatives’ shadow economy secretary, warned steel products from China could flood the Ƶ as a result of continental markets closing their doors.
Mr Kurtz also expressed concerns about the Ƶ’s comparatively high electricity costs amid a transition away from blast furnaces to an electric-arc furnace at Port Talbot.
Labour’s John Griffiths, who represents Newport East – which includes the Llanwern finishing plant – warned steel is in a vulnerable position following the Ƶ’s exit from the EU.
Ms Evans replied: “I absolutely agree it’s really important that we consider our steel sector in its entirety here in Wales and that we make sure that the decisions that are taken now by the Ƶ Government reflect the entirety of our steel industry.
“That’s why it’s so important, as well, that we continue our discussions with the unions because they have a really good feel of the situation on the ground and they have good ideas, as well, as to how we can continue to address this issue.”
The Senedd’s economy committee will take evidence on the future of Welsh steel today, hearing from Tata Steel Ƶ chief executive Rajesh Nair and trade unions.
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 Ƶ 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 Ƶ Government to negotiate preferential treatment for the Ƶ and for Britain to have its own import quotas.
Gareth Stace, director-general at Ƶ Steel, said: “This is perhaps the biggest crisis the Ƶ steel industry has ever faced. Government must go all out to leverage our trading relationship with the European Union to secure Ƶ country quotas or potentially face disaster. The probability of the EU’s measures redirecting millions of tonnes of steel towards the Ƶ could be terminal for many of our remaining steel companies.”
Alasdair McDiarmid, assistant general secretary at the Community trade union, said: “Given that around 80% of the Ƶ’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.”
Charlotte Brumpton-Childs, GMB union national officer, called the measures a “hammer blow” to the Ƶ steel industry. She said: “This could be the end of steel-making in the Ƶ if proper safeguards aren’t secured.”
Ƶ industry minister Chris McDonald said: “We will always defend our critical steel industry, which is why we are pushing the European Commission for urgent clarification of the impact of this move on the Ƶ.
“It’s vital we protect trade flows between the Ƶ and EU and we will work with our closest allies to address global challenges rather than adding to our industries’ woes.”
