The UK will extend a package of quotas and tariffs on foreign steel imports by two years in an effort to protect domestic producers, the international trade secretary announced on Wednesday.
Anne-Marie Trevelyan admitted that the move would risk a legal challenge at the World Trade Organization, which oversees global trade, but said it was essential to protect Britain’s steel industry.
“We have concluded that it is in the economic interest of the UK to maintain the safeguards to reduce the risk of material harm if they were not maintained,” she told the House of Commons.
However, some experts believe extending the tariffs would constitute a breach of the UK’s international legal obligations under WTO rules.
Lord Christopher Geidt quit this month as ethics adviser to Boris Johnson, the prime minister, citing his disapproval of the plan to breach international law through steel tariffs as part of the reason for his decision.
The government will extend existing steel tariffs, largely on developed countries and China, by a further two years. It will also expand import limits to other, mostly developing but as yet unnamed, countries to prevent a flood of steel into the UK after some of them increased their exports to the UK beyond the legal threshold.
Trevelyan said Ukraine would not be included, in order to help its steel industry.
The move was welcomed by trade unions and UK Steel, the industry trade body, which said it showed that the “government is backing Britain’s steel industry”.
“As the UK establishes itself as an independent trading nation, [ministers] have taken their duty seriously to stand up for jobs in British steelmaking and for the future of this strategic industry,” said Gareth Stace, UK Steel’s director-general.
The interventions, he added, would “guard against anticipated surges in imports from trade diverted away from the US and EU markets that will remain shielded for years to come” and which would have “risked jobs, investment, and our ability to transition to net zero”.
Sir Andrew Cook, chair of family-owned Sheffield steel fabricator William Cook, said unrestricted imports would have “created a great deal of damage, not just to the domestic industry but also on a wider scale”.
Most of the “offending steel comes from China . . . which has almost single-handedly created enormous overcapacity”, he added, noting that there were also questions over the reliability of that country’s product quality control.
The UK sector employs more than 33,000 people directly and supports a further 42,000 jobs in supply chains.
The two largest producers, Tata Steel and British Steel, are both backed by foreign owners — India’s Tata and China’s Jingye Group, respectively. Liberty Steel, which has manufacturing sites in Yorkshire, is owned by Sanjeev Gupta’s GFG Alliance. GFG’s companies are under investigation by the Serious Fraud Office over suspected fraud and money laundering.
The UK adopted “safeguard” measures in 2018 while it was part of the EU and has since rolled over most of them.
The limits, which apply to 15 categories of steel, restrict how much a country can export to Britain before being hit with a 25 per cent tariff.
Nick Thomas-Symonds, shadow trade secretary, welcomed the decision, saying it would provide “welcome relief” to the steel industry, but criticised the government for not moving faster.
The decision, however, has sparked concerns among some UK manufacturers who said they had to rely on overseas steel as domestic suppliers were unable to meet demand.
“The cost changes associated with further tariffs will force businesses across the supply chain to scrutinise their contracts,” warned Mark Stefanini, partner at law firm Mayer Brown. “They will be seeking to understand whether and in what circumstances they are required to pay these additional costs and if so whether they can in turn pass them on to their customers.”
Source: Economy - ft.com
