Tariffs and import quotas to help UK steel plants

The UK Government has announced higher tariffs on imported steel and a higher target for steel made domestically.

Although a target date has not been specified, the required proportion of British-manufactured steel in the economy would rise from 30% to 50%. Business secretary Peter Kyle said: ‘I need to defend the sector from anti-competitive behaviour from elsewhere in the world’.

Transitional

Kyle announced that July quotas on imported steel would be reduced by 60% and any products bought in above that level would face a new 50% tariff. The government is looking into a ‘transitional approach’ where its 50% tariff would not apply to goods under contracts agreed before 14 March and imported between July and September. He denied the measures were protectionist.

The EU has already announced a similar range of measures from July. Tariff-free import volumes will be cut to 18.3 million tonnes a year, a reduction of 47% compared to 2024 quotas. The ‘out-of-quota’ duty will double to 50% compared to 25% under the current regime.

Pressure

In the UK, imports account for 70% of UK steel demand and there has been growing pressure from within the UK industry to match this approach to protect domestic steelmaking. The government is now in effective control of plants in Rotherham and Scunthorpe after their private-sector owners said they were no longer viable. It is spending millions to keep them open.

Gareth Stace, dg of UK Steel, called it ‘a crucial moment’. ‘With global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives.’