UK Steel's recommendations to strengthen existing steel safeguard
measures have been taken forward today after the Secretary of
State stepped in at a critical time for industry – crucially, it
has been confirmed the changes will take effect on 1 July.
The Secretary of State, , is following UK Steel's
recommendations to tighten the existing steel safeguards to a
0.1% quota liberalisation, down from 3.0% year-on-year. This will
be fundamental to diminishing the injury caused to UK steelmakers
by a spike of foreign steel imports directed away from the US
market after US steel import tariffs were increased.
The Government has also accepted UK Steel's argument to implement
a cap on certain import levels (known as residual quotas) and
tightening country-specific limits, preventing individual
countries from dominating quotas and harming domestic producers.
The Business Secretary will also implement the Trade Remedies
Authority's recommendations to prevent unused quarterly quotas
from being rolled over to the following quarter and prevent
countries with a specific quota from accessing residual quotas in
the final quarter, in line with UK Steel's requests.
UK Steel Director-General, Gareth Stace,
said:
“The Secretary of State, , has again shown that he
is on the side of British industry in following UK Steel's calls
to tighten the existing steel safeguards urgently. This swift
move is crucial to diminishing the injury caused to domestic
steelmakers by steel that is redirected away from the US market
after President Trump's steel import tariffs increase.
“We now need to back the tightened safeguards up with the
comprehensive new trade defence mechanism replacing the current
system when it ends next year. Implementing the new mechanism in
January 2026 will help to develop the positive business
environment our country craves and encourage private investors to
enter the sector, ensuring we not only survive but
thrive.
“The Government has made the right decision today, in
response to a tough trading environment where subsidised imports
undermine domestic steel production.”
Notes to editors
The Secretary of State's decision:
-
DBT: Trade remedies
notice
- Increase the overall volume of each category's tariff-rate
quota by 0.1% from 1 July 2025.
- Apply a 15% cap in the residual quota of category 4 and a 20%
cap in the residual quotas of categories 7 and 13 to ensure that
UK imports from exporting countries are more closely aligned with
traditional trade flows, effective from 1 July 2025.
Amend the allocation of the tariff-rate quotas as below, in line
with the recommendation of the Trade Remedies Authority:
- Prevent any unused quarterly quotas from being made available
in the following quarter.
- Prevent WTO Members with a country-specific quota from being
able to access the residual quota in the final quarter.
- Update developing country exemptions based on UK import data
for the period 1 January 2024 to 31 December 2024 and in line
with the WTO Agreement on Safeguards.
Consultation on new mechanism: The Department
for Business and Trade (DBT) last week opened a call for
evidence from steel companies as it starts the process
of designing a replacement mechanism for steel safeguards which
are scheduled to expire in June 2026.
TRA safeguard quota review:
- The review was prompted by a UK Steel application to the TRA
in response to the implementation of US steel tariffs as well as
the tightening of the EU's equivalent measures, both increasing
the trade diversion pressure onto the UK market.
- Safeguards in the UK have been in place since 2018 in
response to US Section 232 tariffs being first introduced. Since
then, these have been liberalised year after year as per WTO
rules and are now 22% larger, all while steel demand in the UK
has contracted by 16%. As a result, these quotas are oversized
and ineffective in shielding the UK market from trade diversion.
- In its application to the TRA, UK Steel requested that UK
quotas be tightened in line with the fall in domestic demand, but
the UK's trade remedies regulation is more restrictive than both
the EU's and what is required by the WTO.
The TRA proposed the following modifications to the UK's
safeguards quotas:
- 40% individual country caps under the “Other countries” quota
for metallic coated sheet, plate and rebar, effective from
October 2025 (instead of the requested 15% effective from July)
- Removal of carry-over of unused quota from quarter to quarter
and removal of access to residual quota in the final quarter by
countries with their own quotas
- The TRA did not accept UK Steel's requests below when the EU
has been able to make these changes, due to more restrictive UK
legislation:
- Reducing the rate of liberalisation of the quotas from
July
- Removing the portion of sanctioned Russian and Belarusian
quotas that have been previously redistributed to other
countries
Global excess capacity:
- Global excess capacity was estimated at 602Mt in 2024 and is
forecasted to reach 721Mt by 2027 – equivalent to more than 100x
the UK's production.
- Capacity expansions in Southeast Asia and the Middle East are
continuing at an alarming rate – these are largely state-funded,
mostly for high-emission blast furnaces and often do not
correspond to domestic demand trends.
- Steel demand is weakening in key markets, notably China,
translating into rising oversupply, which is dampening steel
prices and spilling over into other markets.
- Import pressure on the UK market is on the rise amid a weak
demand environment. The import share in 2024 already increased to
65% from 60% in 2022. The sharpest import increases came from
non-EU sources, mainly India, Vietnam, China, South Korea, Turkey
and Algeria. Importantly, these are also countries that have seen
significant increases in imports from China or are within China's
top 10 exporting destinations.
- Over two-thirds of steelmaking capacity is in countries that
have Net Zero targets later than 2060 or none at all.
UK Steel safeguards:
-
Safeguards are a type of
trade remedies measure intended to address unexpected surges in
imports that are damaging or threatening to damage domestic
producers. Safeguards can take various forms but the most
common is a tariff-free quota – this allows the continuation of
tariff-free imports at the same level or higher as the period
before the safeguard was introduced.
- The UK inherited its steel safeguards from the EU which
introduced its own equivalent measure in 2018 principally to
guard against import diversion from the US after the introduction
of Section 232 tariffs by President Trump. This mechanism expires
under WTO rules in June 2026.
- The UK is only partially shielded from trade diversion
expected to occur as a result of President Trump's new 2025 25%
steel tariffs. Steel safeguard quotas have been liberalised every
year and are now 22% larger than when they were first introduced
in 2018. All while UK demand has contracted by 16%.
- Even a small proportion of surplus material ending up in the
UK would completely overwhelm the UK steel market. Most of these
imports will be of high-emission steel.
EU steel safeguards review:
- The Commission reviewed its steel safeguards, resulting in
tariff-rate quotas becoming more restrictive. The amendments took
effect on 1 April.
- The Commission has reduced the liberalisation rate from 1% to
0.1%, limiting the amount of steel that can be imported into the
EU tariff-free.
- Additionally, countries will no longer be able to use the
entire volumes of unused quotas of other countries, including
those of Russia and Belarus. The ‘carry-over' mechanism, which
allowed countries to roll over unused quotas to the next quarter,
has also been eliminated for categories with high import pressure
and low consumption.
About UK Steel: UK Steel is the trade
association for the UK steel industry. It represents all the
country's steelmakers and most downstream steel processors.
The UK steel sector:
- Produced 4Mt of crude steel in 2024 and supplied 30% of the
UK's annual demand of 9.2Mt
- Employs 36,800 people directly in the UK and supports a
further 46,000 in supply chains
- The median steel sector salary is £39,245, 24% higher than
the UK national median and 33% higher than the regional median in
Wales, and Yorkshire & Humberside where its jobs are
concentrated
- Directly contributes £1.7 billion to UK GVA and supports a
further £2.2 billion
- Directly contributes £3.1 billion to the UK's balance of
trade
- 96% of steel used in construction and infrastructure in the
UK is recovered and recycled to be used again and again
