UK Steel welcomes TRA recommendation to extend steel safeguards until 2026

21 February 2024

Today the Trade Remedies Authority (TRA) has recommended the extension of the UK’s steel safeguards for all 15 product categories currently covered by the measure until June 2026.

Safeguards are an essential trade remedies tool to shield industry from surges in imports as a result of trade diversion and distortions in international trade. All the reasons why the UK’s steel safeguards were first introduced are not only still in place, but conditions have in fact deteriorated. Trump era Section 232 tariffs continue to deflect trade to exposed markets. In a year alone, global steelmaking overcapacity rocketed by 23%, and continues to rise against a backdrop of high costs and weak steel demand. The EU will almost certainly be extending its own safeguards.

The TRA found that if the measures were not extended beyond June 2024, imports into the UK would likely increase causing severe injury to UK producers. 

The final decision now lies with the Secretary of State for Business and Trade, Kemi Badenoch, and is crucial at a time when significant investment is required for decarbonising the sector amid a challenging market environment.

Responding to the TRA’s recommendation, UK Steel Director General, Gareth Stace, said:

“The TRA’s recommendation is a huge relief for the steel sector, knowing that we are one step closer to retaining this vital measure for another two years. UK Steel is delighted that the TRA has recognised that steel safeguards are more than ever necessary to shield the UK from the inevitable trade diversion of all the surplus material that will be shut out of other key markets.

“Global excess steelmaking capacity of 630 million tonnes is a shocking 60 times the size of the UK market. Even a small proportion of this steel being diverted to the UK would completely overwhelm our market. Capacity is still growing, mostly state-funded and largely for high-emissions steel.

“The final decision is now in the hands of the Secretary of State. UK steelmakers and this Government have come a long way in improving our competitive position and progressing our Net Zero ambition. Letting diverted steel imports unfairly take away our market share would be counterproductive and directly undermine the UK’s decarbonisation efforts and investments. We trust the Secretary of State will recognise this and ensure this key measure is maintained.”

Notes

Contact details 

Louise Young, Campaigns and Engagement Manager, UK Steel   07388 370176 | Lyoung@makeuk.org     

• The Trade Remedies Authority's announcement details can be found here.
• Safeguards are a trade defence instrument setting tariff-free quotas based on historical imports. Once quotas are exhausted a 25% tariff applies. 
• The purpose of safeguards is not to limit or reduce imports, but to act as a cap to significant increases in imports resulting from trade distortions. 
• Steel safeguards were introduced in 2018 at an EU level in response to US Section 232 tariffs causing trade diversion and global steelmaking excess capacity. 
• The US measures, still in place today, introduced a 25% tariff on all steel imports with an aim to significantly reduce the 30 million tonnes of steel that were imported into the US each year. 
• The OECD reported global excess capacity at 630 million tonnes in 2022, up from 513 million tonnes in 2021. 
• While the US has since agreed tariff-free quotas with some countries including the EU and the UK, most countries still face 25% tariffs when exporting to the US. 
• The UK transitioned steel safeguards for 19 product categories in 2021, of which 15 were maintained. The TRA has been reviewing whether they should be left to expire in June 2024 or extended until 2026. 
• Following the TRA recommendation, the Secretary of State must decide ahead of 30 June 2024 whether to extend the safeguards for all or some of the product categories. 
• Previously a Secretary of State could only accept or reject a TRA recommendation, but reform of the UK’s Trade Remedies legislation last year has offered greater flexibility in accounting for wider national interest considerations when making these decisions.  

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:   

• Produces 6Mt of crude steel a year, around 70% of the UK’s annual requirement (annual demand of 8.9Mt)   
• Employs 39,800 people directly in the UK and supports a further 50,000 in supply chains   
• The median steel sector salary is £39,637, 43% higher than the UK national median and 56% higher than the regional median in Wales, and Yorkshire & Humberside, where its jobs are concentrated   
• Directly contributes £2.9 billion to UK GDP and supports a further £3.8 billion   
• Directly contributes £4 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  

For further information about the steel industry, please see the press pack, Why the UK needs a strong steel sector or the 2023 UK Steel Key Statistics report.