The British Chambers of Commerce has urged the UK government to revise planned changes to steel import quotas and tariffs that were set to take effect on July 1, warning that the new regime could impose significant financial and logistical pressure on small and medium-sized companies in steel-consuming sectors.
In a June 17 statement, the BCC said the proposed system would reduce tariff-free import quotas by 60% overall, with some steel product categories facing cuts of up to 90%. At the same time, tariffs on imports above quota limits are set to rise from 50% to 25%, creating what the business group described as a “double hit” for companies already dealing with high costs and fragile supply chains.
In March 2026, the UK government announced a new steel trade measure that takes effect on July 1, 2026, to help UK steel producers and shield them from global overcapacity. The new tariffs and quotas must be in place by the beginning of July, when the current safeguards, negotiated while the UK was still part of the EU, expire.
Europe will put in place new safeguards starting July 1, 2026, that will lower import quotas by limiting tariff-free import volumes to 18.3 million mt annually, a 47% reduction compared with 2024 steel quotas. The measures would also apply a 50% customs duty — instead of the current 25% — to imports above the quota and to steel goods not covered by it. The new EU tariffs will also introduce a new “melt and pour” rule.
BCC said it wrote to Business and Trade Secretary Peter Kyle in May to raise concerns that the new arrangements could create “real financial and logistical problems” for downstream industries, including construction, engineering, and manufacturing. These sectors rely heavily on imported steel products, which the BCC said cannot be obtained domestically.
The proposed UK quota reduction is steeper than the EU’s, and the chamber has warned that the difference could leave UK businesses at a competitive disadvantage, particularly when domestic supply is unavailable or insufficient to meet specific product needs.
In its letter to the business secretary, the BCC recommended reducing the scale of the quota cuts to better align with international partners and lowering or phasing in the proposed 50% tariff on imports above quota.
The group also called for extending transitional easements for existing orders from three months to at least 12 months, alongside the publication of a full impact assessment of downstream sectors.
The BCC said it had received a response from the government, but added that it did not adequately recognize the “cliff-edge” facing affected businesses. The chamber said time was running out to lay the statutory instrument in Parliament that would confirm the final details of the regime.
William Bain, head of trade policy at the BCC, said the July 1 deadline was rapidly approaching and that the government’s remaining opportunity to avoid “huge self-inflicted damage to the economy” was narrowing.
“Affected sectors rely heavily on imported steel products that can’t be obtained domestically, and some will be facing millions of pounds in additional costs when quotas are exhausted,” Bain said.
He said that some companies had told the BCC they would not be able to continue operating under the proposed regime, while others said they may have no choice but to relocate to the EU.
UK-EU agreement seen as long-term solution
The BCC said the government should accelerate efforts to reach a UK-EU agreement to remove tariffs on steel trade. Bain said the long-term solution should include dedicated UK quota shares within the EU’s new quota system, which he said would reduce costs for UK industries that import steel from the EU.
The chamber said it is seeking a meeting with EU Ambassador Pedro Serrano to press for such an agreement. In the meantime, Bain said the UK government should keep an extension of transitional easements under consideration.
The BCC also said the Indian government had paused implementation of its free trade agreement with the UK following concerns over the impact of the new steel quotas on its trade.
For UK steel consumers, the immediate concern is that tighter quota limits could be quickly exhausted after July 1, exposing importers to the higher 50% tariff and increasing costs across supply chains that depend on imported steel.
EU safeguards were first put in place to avoid a domino effect from the Section 232 tariffs imposed during the first Trump administration and from steel overcapacity, now estimated by the OECD to be 721 million mt in 2027. While Europe as a bloc is far more self-sufficient — the EU 27 together produced 126 million mt in 2025, with some mills not operating at full capacity amid low demand, and EU apparent demand estimated at 132 million mt — the UK produced just 2.6 million mt of crude steel, supplying only 30% of the UK’s annual demand of 10.3 million mt.
Author: Annalisa Villa
