Preliminary outcome of TRA steel safeguard quota review reinforces need for swift Government trade defence intervention

13 May 2025

The Trade Remedies Authority (TRA) has today published its preliminary determination following its review of the UK’s steel safeguard mechanisms. UK Steel first raised concerns about the existing safeguard mechanism after President Trump ramped up US steel import tariffs, potentially swamping the UK if steel bounces back from the US border.

The final recommendation to the Secretary of State will follow in June. The TRA’s amendments go some way to address the fears raised by UK Steel but fall short of what is required given the scale of the challenge the UK industry is faced with.

This increases the urgency of the UK Government developing and implementing a robust trade defence mechanism to replace steel safeguards, which in any event will expire in June 2026 as per World Trade Organisation (WTO) requirements. Even before US tariffs, this has been the most critical trade issue for steel as global excess capacity continues to rise while steel demand continues to weaken, particularly in China, leading to surges in exports that flood markets without appropriate trade defences. Global overcapacity was estimated at 602 million tonnes (Mt) in 2024 and is forecasted to reach 721Mt by 2027 - the UK consumed 8Mt last year.

UK Steel Director-General, Gareth Stace, said:

“The outcome of the TRA’s safeguard quota review does little to effectively defend the UK steel industry from the vast amounts of surplus steel looking to be offloaded onto our shores.

“The TRA went as far as it could go within the confines of the unnecessarily restrictive UK regulation. Time and time again we find ourselves hamstrung because UK rules are more restrictive than both the EU’s and what is required by the WTO. The UK is increasingly an outlier in adhering to outdated trade rules that are at the expense of the national interest.

“It is now time for Government to step up and swiftly replace ineffective steel safeguards with a robust trade defence mechanism of quotas designed to suit the reality of the market and the world today. There is no need to wait until June 2026. Strong defence must be a core component of the upcoming Steel Strategy to ensure the market stability and certainty that are essential for investment.”

Analysis

• 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 are 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 is proposing 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 Belarussian quotas that have been previously redistributed to other countries
  • The review outcome can be found here.
    
    
• Global excess capacity:
  • Global excess capacity was estimated at 602Mt in 2024 and is forecasted to reach 721Mt by 2027 – equivalent 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.

Contact details 
Chrysa Glystra, Director, Trade and Economic Policy, UK Steel 
07771 388692 | cglystra@makeuk.org     

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