Key facts
- New UK steel trade measures take effect on July 1, 2026.
- Tariff-free import quotas are reduced by 51% compared to previous measures.
- Tariffs on steel imports exceeding quotas will increase to 50%.
- The measures aim to protect domestic steel production from global overcapacity.
- The government is providing up to £2.5 billion in financing for the sector.
The UK government has implemented new steel trade measures, effective July 1, 2026, which significantly reduce tariff-free import quotas and increase tariffs on imports exceeding these limits. The government stated that domestic steelmaking is crucial for national infrastructure and defence supply chains, which have been severely impacted by persistent global overcapacity. According to the OECD, the gap between global steel capacity and demand is projected to reach 721 million metric tonnes by 2027. UK crude steel production has declined by over 50% in the last decade due to these dynamics.
The new measures limit tariff-free steel imports, reducing overall quota volumes by 51% compared to the previous steel safeguard measure. Imports above these new levels will face a 50% tariff, a substantial increase from the previous 25% safeguard duty. These measures apply to imports of steel products that can be manufactured in the UK. The government aims to increase the share of domestically produced steel in UK consumption from the current 30% to up to 50%.
To support the industry, up to £2.5 billion in financing is available through the National Wealth Fund to encourage private-sector investment. The government also confirmed that electric arc furnaces are the future production technology, aligning with net-zero goals. The measures cover 15 categories of steel products, primarily within HS Chapters 72 and 73, including metallic coated sheets, non-alloy quarto plates, alloy merchant bars, and rebar.
This action is part of a broader international response to global steel overcapacity, with similar measures implemented or proposed by the United States, the European Union, and Canada. The UK government has indicated a willingness to coordinate steel trade policy with the EU due to interconnected supply chains. Businesses importing steel are advised to review their supply chains, anticipate higher costs for above-quota imports, and monitor quarterly quota allocations. Domestic producers may see potential market share gains, while downstream industries like construction and automotive could face short-term cost pressures.