The British Chambers of Commerce (BCC) has warned that changes to UK steel quotas and tariffs could add millions of pounds to manufacturers’ costs.
In a letter to the Business Secretary, Peter Kyle, the BCC said the proposed regime risks creating ‘real financial and logistics problems’ for downstream industries. These include construction, engineering and manufacturing, which rely heavily on imported steel products that can’t be obtained domestically.
The new system, which is set to be introduced on July 1, reduces tariff-free import quotas by 60% overall, significantly higher than the EU’s 47% reduction. However, some categories of steel are facing cuts of up to 90%.
At the same time, tariffs on imports above the quota limits are set to rise from 25% to 50%, creating a double hit for firms already grappling with high costs and fragile supply chains. 
The letter warns that policy decisions appear to favour primary steel production at the expense of manufacturers who depend on imports of the metal to remain competitive. And it points to a lack of any formal impact assessment of the changes on downstream users of steel.
Evidence gathered from firms across the UK highlights the potential scale of disruption. Some manufacturers face millions of pounds in additional costs if quotas are exhausted.
Others warn they may need to halt production altogether where specialist steel grades are unavailable domestically.
Firms could also be left with little choice but to source steel from cheaper, less sustainable overseas suppliers, undermining the UK’s decarbonisation ambitions and encouraging offshoring of production.
William Bain, Head of Trade Policy at the BCC, said: “The Government rightly takes the protection of domestic steel production seriously, and action by both the EU and US on tariffs means the status quo is unsustainable.
“But there is a serious risk of unintended consequences from its tariff and quota proposals which could harm the UK’s manufacturing base at a critical time.
“The economy is already reeling from the impact of the Middle East conflict and soaring energy prices.
“Yet these plans will force up costs sharply for firms which rely on imported steel products that simply aren’t available from domestic suppliers.
“The scale and speed of the quota reductions, combined with steep tariff increases, will create a perfect storm for key supply chains.
“Many companies are already warning they will lose competitiveness, cancel orders or relocate production overseas if these changes proceed.
“Without intervention, we risk undermining both our industrial strategy and our net zero objectives. Ministers must act quickly to rebalance the proposals, so they support the entire steel ecosystem, not just a part of it.”
The BCC’s proposals to mitigate the damage, include:
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