Key facts
- UK government reduced proposed steel import tariffs from 60% to 50%.
- The tariff-free steel import quota was increased, allowing 3.2m tonnes before the 50% levy.
- Eleven specific steel types are exempt from the measures.
- A deal with the EU aims to reflect interconnected supply chains.
- The measures are intended to protect domestic producers from cheap Chinese supply.
The UK government has softened proposed steel tariffs following significant backlash from manufacturers who warned of severe repercussions for downstream businesses. Trade minister Chris Bryant announced in a parliamentary statement that the tariff-free steel import quota would be cut by 51%, a reduction from the initially proposed 60%. However, the import duty rate will remain at 50%, effective from July 1.
In parallel, the government has secured a deal with the European Union designed to acknowledge the interconnectedness of supply chains between the UK and the EU. This comes as both regions have been increasing trade barriers to protect their domestic steel industries, raising concerns about potential trade disruptions.
Under the revised plan, Britain will allow 3.2 million tonnes of steel imports before the 50% levy is applied. Additionally, 11 specific steel types will be exempt from the measures, a concession made in response to industry concerns about the lack of local alternatives. The government's stated aim is to shield the UK's steel producers from an anticipated influx of low-cost Chinese steel.
William Bain, head of trade policy at the British Chambers of Commerce, described the revised measures as a "welcome tilt towards the needs of the UK’s downstream steel users." He acknowledged the government's difficult task in balancing the interests of producers and users, influenced by global trade actions. Bain suggested that while the government committed to a review in a year, quicker action might be needed if firms face severe financial distress.
The British Chambers of Commerce had previously led opposition to the initial proposals, which they argued would cause "immediate hardship" to the automotive and construction sectors. The government views domestic steel production as vital for critical national infrastructure, including nuclear power stations and defense industries, and its measures align with similar protectionist actions taken by Europe and the United States.