Owning player gets to determine which unit takes the step loss.
Usually, but note that there are various exceptions which must be remembered... and I notice that I've been forgetting them. :/
[14.1]Regional / Fortified Units
The German Fortified Units are permanently removed
from the game when eliminated (as stated on their reverse
sides). They must always take the first loss in combat.
[14.5] German SS Panzer Army
• Whenever this unit attacks (or counterattacks), it must take the required step loss in an EX result.
[14.6] SS Panzergrenadier Unit
• Unless attacking with the SS Panzer unit, this unit must
take any required step loss in combat whether attacking
[14.7] Russian Shock Units
• Whenever this unit attacks (or counterattacks), it must
take the required step loss in an EX result.
...I'm not sure if there are other exceptions as well... :/