British Government extends the UK's steel safeguard

The UK steel safeguard limits the volumes of certain steel products that can be imported in to the UK tariff-free. According to the trade body, UK Steel, ‘generous quarterly limits are set for each product at the equivalent of just under 120% of historical import levels’, and once this level is reached a 25% tariff is applied.

Gareth Stace, director-general of UK Steel, believes that it is essential that the UK steel safeguard is maintained in its entirety, claiming that failure to do so risks surges in steel imports that will cause ‘significant damage’ to UK produers.

Stace has argued that jobs, production and investment will be at risk and that unilaterally weakening the safeguard when the EU and the US are committed to maintaining their own would expose UK steelmakers to the full might of growing, state-induced distortions in the global market place, causing up to £150 million/yr in damage.

An elated Stace commented:

"Today’s decision to maintain the UK’s steel safeguard in full once again shows that the Government is backing Britain’s steel industry. Huge credit must be given to the determination and purpose shown by the Prime Minister and the Secretaries of State at DIT and BEIS in ensuring the right result was ultimately delivered. As the UK establishes itself as an independent trading nation, they have taken their duty seriously to stand up for jobs in British steelmaking and for the future of this strategic industry.

"The Government’s interventions will guard against anticipated surges in imports from trade diverted away from the US and EU markets that will remain shielded for years to come. Such surges would have risked jobs, investment, and our ability to transition to net-zero. With high-paying steel jobs concentrated in Yorkshire, Humberside, and South Wales, maintaining the safeguard is also critical for the Government’s levelling up ambitions.

"We are aware this extension was not straightforward. Establishing a trade remedies framework for the first time in 50 years was always going to be challenging and the nature of these measures virtually guarantees some opposition from one quarter or another. However, this is not sufficient reason to shy away from using the trade tools now at our disposal and the Government has done the right thing today in staying the course and ensuring the UK’s steelmakers are not left to the mercy of a global steel market that suffers from overcapacity and state-induced distortions.

"It is vital we now work with partners like the EU, and the US to address the underlying issues that are destabilising global steel markets. Safeguards are not a long-term solution, and the goal here is a global market for steel where we all play by the same rules.’

According to UK Steel, there was a genuine risk of import surges in the absence of measures which were easily demonstrated by increases in imports of steel from countries currently exempt from the UK safeguard. Such imports surged in 2021, reaching over 500kt, up from 165kt in 2015-2017, the period before safeguards were introduced.