Key facts
- UK manufacturers face a 'cliff-edge' from new government steel tariffs, according to the British Chambers of Commerce (BCC).
- The BCC warns the tariffs will inflict 'huge damage' on the UK economy and could force businesses to close.
- In July, tariff-free steel import quotas will be cut by an average of 60%, with duties doubling to 50% on imports exceeding the new quotas.
- Sectors reliant on imported steel that cannot be sourced domestically face millions in additional costs.
- The government argues the measures will protect domestic production and ensure a secure supply.
Manufacturers in the UK are bracing for significant economic repercussions from the government's upcoming steel tariffs, according to a warning from the British Chambers of Commerce (BCC).
The BCC stated that the new duties on foreign-produced steel will likely cause 'huge damage' to the UK economy, potentially leading to business closures. William Bain, the BCC's head of trade policy, highlighted that affected sectors depend heavily on imported steel products that are not available domestically, and some may face millions of pounds in additional costs once quotas are exhausted.
Starting in July, the government plans to reduce the quota for tariff-free steel imports by an average of 60%, while doubling the import duty on steel exceeding these quotas to 50%. For certain steel products, the quota reduction could be as steep as 90%.
Ministers contend that these measures are designed to support the UK's struggling steel industry, which has been impacted by high energy costs and trade barriers from export destinations. This move follows similar actions by the European Union and the United States to protect their own steel sectors.
The BCC has voiced concerns that these changes are unsustainable for the UK's manufacturing base, including the automotive and construction industries. In May, the BCC's director general had written to Business Secretary Peter Kyle, warning of potential financial and logistical problems for downstream steel users and urging a reconsideration of the quota reductions. Despite subsequent meetings with ministers, the BCC stated that the 'cliff-edge' facing businesses had not been adequately recognized.
Adding to the concerns, the Indian government has paused the implementation of its free trade deal with the UK, citing worries about the impact of these quotas.
A government spokesperson affirmed the intention to foster a thriving UK steel sector by balancing domestic production protection with supply security. They indicated that feedback from the industry is being considered and that discussions are ongoing with the European Union to safeguard vital steel trade.