LONDON — Donald Trump’s tariffs have already hammered Britain’s embattled steelmakers — but the EU’s looming trade protection measures could hit them harder still.

The EU is preparing to reduce foreign steel quotas by almost half as part of new measures set to be officially proposed on Tuesday.

That’s a problem for Britain’s metal manufacturers, who export half of what they produce to the EU — their largest export market.

The moves echo a French proposal backed in July by Europe’s steel lobby EUROFER and 11 EU nations, including Spain and Italy. That plan proposed slashing the bloc’s current steel safeguard quotas by 40 percent to 50 percent. Imports exceeding the quotas would catch a 50 percent tariff.

“As a non-EU country, we will worry about this more than the U.S. tariffs,” said a British steel exporter, granted anonymity to speak candidly about commercially sensitive matters. The EU measures “would affect us directly and in terms of trade diversions,” they said, pointing to the further impact of exports diverted to the U.K. by Brussels’ new protections.

“We are deeply concerned by reports that the European Commission is considering significant reductions to steel safeguard quotas,” said Lisa Coulson, chief commercial officer of British Steel. “Such measures would risk shutting British producers out of our largest export market at a time when the sector is already contending with 25 percent tariffs in the United States.”

‘Panic stations’

Some 1.9 million of the 4 million tons of steel Britain manufactures annually goes to the EU. The U.S., by comparison, imports just 200,000 tons of British steel.

“In the case of steel, what the EU is going to do is very, very important,” said Carmen Suarez, co-CEO of the Trade Remedies Authority, Britain’s trade watchdog, adding the proposal will be “watched by many with lots of interest” in Britain’s steel industry and Department for Business and Trade.

The EU’s proposals threaten to have a devastating impact on Britain’s steel industry. Alongside Trump’s tariffs, the sector has been rocked by bankruptcies and the failure of British Steel this year, requiring the government to seize emergency control of its operations.

The EU’s move also risks setting back work in London and Brussels to repair the U.K.-EU relationship in recent months. A U.K. official said Brussels hasn’t yet approached the British government about the issue.

“We are going to adopt by mid-October a very strong trade protection measure,” EU Trade Commissioner Maroš Šefčovič said earlier this month. France’s proposal is getting a lot of traction in Šefčovič’s office, two U.K. steel industry figures said.

Yet it could still be watered down as it passes through the European Council and the Parliament before being implemented next year.

“Given the current context characterized by the new U.S. tariffs, it appears increasingly necessary to adopt a new protective mechanism, strongly requested by the European steel industry,” said an EU diplomat.

“Together with the U.S., we will try to ring-fence our steel production,” Matthias Jørgensen, the European Commission’s head for trade with the U.S. and Canada, told POLITICO’s Competitive Europe Summit in Brussels on Thursday. “And thereby, I hope we will be able to achieve the normalization of trade steel across the Atlantic, and get rid of the U.S. tariffs,” he said, noting “we need to take action to address [overcapacity]” from China.

Yet the EU’s proposal “would be halving our biggest market,” one of the two U.K. steel industry figures quoted above said, calling it one of the “biggest disasters” ever to befall Britain’s steel industry. “It could spell a significant injury,” they said, adding firms throughout the sector are at “panic stations.”

The U.K. government has yet to publish its steel strategy for this year, which promises to set out a viable future for the sector in Britain.

“We are backing a bright future for British steelmaking, committing up to £2.5 billion of investment to rebuild the steel industry and exploring stronger trade measures to protect UK steel producers from unfair behaviours,” a U.K. government spokesperson said, adding officials are awaiting the details of the EU’s plans.

Camille Gijs contributed to this report.