Secretary of State announces strengthened steel safeguards will take effect from 1 July

UK Steel’s recommendations to strengthen existing steel safeguard measures have been taken forward today after the Secretary of State stepped in at a critical time for industry – crucially, it has been confirmed the changes will take effect on 1 July.

The Secretary of State, Jonathan Reynolds, is following UK Steel’s recommendations to tighten the existing steel safeguards to a 0.1% quota liberalisation, down from 3.0% year-on-year. This will be fundamental to diminishing the injury caused to UK steelmakers by a spike of foreign steel imports directed away from the US market after US steel import tariffs were increased.

The Government has also accepted UK Steel’s argument to implement a cap on certain import levels (known as residual quotas) and tightening country-specific limits, preventing individual countries from dominating quotas and harming domestic producers.

The Business Secretary will also implement the Trade Remedies Authority’s recommendations to prevent unused quarterly quotas from being rolled over to the following quarter and prevent countries with a specific quota from accessing residual quotas in the final quarter, in line with UK Steel’s requests.

UK Steel Director-General, Gareth Stace, said:

“The Secretary of State, Jonathan Reynolds, has again shown that he is on the side of British industry in following UK Steel’s calls to tighten the existing steel safeguards urgently. This swift move is crucial to diminishing the injury caused to domestic steelmakers by steel that is redirected away from the US market after President Trump’s steel import tariffs increase.

“We now need to back the tightened safeguards up with the comprehensive new trade defence mechanism replacing the current system when it ends next year. Implementing the new mechanism in January 2026 will help to develop the positive business environment our country craves and encourage private investors to enter the sector, ensuring we not only survive but thrive. 

“The Government has made the right decision today, in response to a tough trading environment where subsidised imports undermine domestic steel production.” 

Contact details

Louise Young, Campaigns and Engagement Manager, UK Steel 

07388 370176 | Lyoung@makeuk.org

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 be 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 proposed 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 Belarusian quotas that have been previously redistributed to other countries

 The Secretary of State’s decision: 

• Increase the overall volume of each category’s tariff-rate quota by 0.1% from 1 July 2025.
• Apply a 15% cap in the residual quota of category 4 and a 20% cap in the residual quotas of categories 7 and 13 to ensure that UK imports from exporting countries are more closely aligned with traditional trade flows, effective from 1 July 2025.

 Amend the allocation of the tariff-rate quotas as below, in line with the recommendation of the Trade Remedies Authority: 

• Prevent any unused quarterly quotas from being made available in the following quarter.
• Prevent WTO Members with a country-specific quota from being able to access the residual quota in the final quarter.
• Update developing country exemptions based on UK import data for the period 1 January 2024 to 31 December 2024 and in line with the WTO Agreement on Safeguards.

Consultation on new mechanism: The Department for Business and Trade (DBT) last week 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. Global excess capacity: 

• 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.

 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.