The British government is set to get tough on imported steel with the news that it has launched its UK Steel Strategy, according to a report on the BBC news website.

Under new Government strategy, the UK steel industry will be expected to make half of the steel it uses and there will be higher taxes imposed on those who buy steel from abroad.

Imported steel quotas will be lowered and anything brought in above the quota level will be subject to a new 50% tariff.

The UK steel industry, which has been piling pressure on the UK government for some time to protect it from the cheaper steel made abroad has welcomed the measures.

Gareth Stace, director general of UK Steel, told the BBC that the UK has for too long lacked a coherent plan for steel, which, he said, "underpins our national security, our energy transition, and the delivery of critical infrastructure".

Stace commented that global markets have been distorted by 'overcapacity and subsidy' and that, 'a clear and ambitious domestic strategy' is what is needed to ensure steelmaking survives and thrives in the UK.'

According to the BBC, "While most producers have bought their energy months in advance, surging energy costs remain a significant future threat, with fears the [current] US-Israel war with Iran could cause prolonged disruption to supplies and a sustained spike in prices".

Business secretary Peter Kyle told the BBC that the new tariffs were not a protectionist measure and they would not push up prices for those who buy steel from overseas. But the shadow business secretary, Andrew Griffith, argued that the measures will mean more costs for the construction industry and less infrastructure investment.

It is also argued by the Conservatives that the 'red tape' surrounding tariffs would stymie economic growth.

No timeframe has been established by for the 50% steel production target, but quotas on imported steels will be 'significantly reduced' from July, it is claimed.

As the BBC pointed out, the British government has a strong incentive to make UK steel work 'as it is in effective control' of steel works in Scunthorpe and Rotherham previously run by British Steel and Liberty Steel.

The GMB union has welcomed the Government's announcement of a UK Steel Strategy, but said it was waiting for detail, adding "questions around ownership of Scunthorpe and the future technology mix will be key to our members and their livelihoods".

The British government's new measures were announced by Peter Kyle at Tata Steel UK's headquarters in Port Talbot, South Wales, where a large electric arc furnace is currently under construction and will soon be making steel using scrap metal in tune with a global transition to 'green steel'.

Ultimately, the blast furnace is now 'old tech' and as electric arc furnaces become increasingly more sophisticated and more capable of producing advanced grades of steel, like those needed by the automotive industry, they will take over from traditional steel production methods.

The government’s new Steel Strategy includes:

  • A target to increase UK-made steel from 30% to 50%, acknowledging steel as a strategic national asset
  • A proposal to reduce steel import quotas by 60% and impose a 50% tariff on out-of-quota imports
  • A commitment of up to £2.5bn for investment in the steel sector.