Government calls on steel companies to contribute to post-safeguard trade defence design
25 June 2025
The Department for Business and Trade (DBT) has today 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.
The safeguards were an emergency and temporary device designed to prevent surges in imports from flooding the UK market. However, their quotas have liberalised every year making them less effective as a defence measure, and they legally expire in 2026.
The Government now must introduce a new mechanism, utilising the new powers it will have from the Trade Strategy, that will go further to protect UK steel companies and ensure they have a sustainable slice of their own market.
UK Steel will press for a strategy that will bring fairness back to the market and encourage companies to bring capacity back online, rebuilding the industry and supporting the broader supply chain. The replacement measures must also be brought forward in January rather than at the last possible minute in June 2026. If the UK is going to encourage private investment and build up the steel sector, there must be as much clarity as possible that steel assets are viable and maintain a sufficient level of support.
UK Steel Director-General, Gareth Stace, said:
“Government’s commitment to defending the steel industry from a flood of subsidised imports with the design of its new trade defence mechanism is yet another signal that the Secretary of State understands that sector is crucial to the prosperity of the UK.
“A comprehensive new trade defence mechanism is critical to developing the certain and productive business environment our country deserves. Bringing in the mechanism in January would encourage private investors to enter the sector and provide extra security to our existing industry.
“A robust new trade defence mechanism coupled with Government’s Trade, Infrastructure and Industrial Strategies means we could thrive against tough international trading conditions and expand to meet our country’s steel demand.”
Contact details
Louise Young, Campaigns and Engagement Manager, UK Steel 07388 370176 | Lyoung@makeuk.org
Global excess capacity:
- UK Steel’s report, Steel Trade Beyond 2026, outlines how global excess steel production capacity, driven by non-market forces, poses an existential risk to the UK steel industry and has the potential to cancel out all other efforts and investments in decarbonisation.
- 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.