UK to halve tariff-free steel imports to counter glut of cheap Chinese metal | Steel industry

The UK government will halve the amount of duty-free steel imports allowed in a bid to offset a global oversupply of cheap Chinese metal and boost a beleaguered local industry.

The new “safety measures” will come into effect on July 1 and will overlap with similar new restrictions introduced by the EU for the same purposes.

At the same time, customs duties on steel imports above duty-free quotas will be doubled, reaching 50% of the product value.

The quotas replace existing pre-Brexit rules that set import levels across the EU. Britain retained the rules after leaving the bloc.

Under the new rules, the current quota of duty-free steel allowed into the UK will be reduced by 51%, less than the 60% reduction proposed in March. This means only 3.2 million tonnes can be imported duty-free into the UK in the future.

Trade Secretary Peter Kyle said: “This steel trade measure, including today’s finalized quota volumes, is designed to both protect UK steel production from global overcapacity and give businesses in the supply chain the certainty they need.

“We will continue to engage with the industry and review the measure after 12 months.”

The government will also exempt manufacturers using 11 specific types of steel from duty, following demands from industrialists that import duties would cripple them as there is no local alternative supply.

There are 28 types of steel in guards, from steel bars used to reinforce concrete in construction to rolled sheets used in stainless steel sinks and airplanes.

The UK produces around 3 million tonnes of steel a year, compared to the world’s supply of around 2 billion tonnes.

UK industry trade body UK Steel has previously said that without these dramatic measures, British industry faces an “existential threat”. But steel users in the UK had protested that quotas risked increasing prices of many products unavailable in Britain’s few remaining furnaces.

The biggest export market for British steel is the EU and negotiators have spent the last three months trying to reach a deal with EU representatives at talks in Geneva, the headquarters of the World Trade Organisation.

Government and EU sources say global overcapacity comes from subsidized industries in China and other countries. When domestic demand declines in China, excess steel reaches export markets, undermining local industries.