The Trade Strategy is a first step towards a sustainable steel market

25 June 2025

UK Steel is delighted to see the Government has used the publication of its Trade Strategy to arm itself with the weapons it needs to defend industries such as steel. The Government has listened closely to UK Steel and our message that policymakers have to utilise robust trade defence to counter global overcapacity and the flood of subsidised steel entering our market.

The Trade Strategy will enable the Government to counter unfair trade and deliver a level playing field so that UK companies can compete. But the legislation to do this is just the beginning. What the steel industry needs is the Government to use its tools to develop a robust trade defence mechanism that will replace the existing safeguards before the quotas expire in June 2026.

A system is needed that finally addresses the distortion of global overcapacity and subsidies and encourages private investors that the UK is a viable location for investment in steel assets. Government has today announced a ‘call for input’ on designing this new system, which is welcome news, and UK Steel advocates for the new mechanism to be in place in January. A strong trade defence policy can regenerate UK steel assets, bringing back jobs and ensuring the sector will not only survive, but thrive.

UK Steel Director General, Gareth Stace, said:

“This Trade Strategy marks a critical turning point. For years, our industry has sounded the alarm on the damage caused by subsidised imports and global overcapacity. Now, this Government is responding and arming the UK with weapons it needs to defend the steel industry.

“For too long the Government has been hamstrung by self-imposed rules that allow bad actors to take advantage of our open market. This has enabled state-subsidised steel to rip market share away from domestic producers, at the cost of thousands of good jobs in some of the most economically vulnerable regions in the country, and fracturing manufacturing supply chains, making us more reliant on imports.”

“We need swift and decisive action to build a trade defence regime that is fit for purpose and in place before current safeguards expire in 2026. With the right tools and the political will to use them, the UK can reassert control over its steel market, protect skilled jobs, and give investors the confidence that the UK steel sector has a strong and sustainable future."

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.

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.