The current measures, which cover 15 categories of steel would expire on June 30, 2024, if they were not extended.
The TRA began an extension review of the safeguard measure in September 2023. At the time of conducting its review, TRA found that imports would likely increase, adding “that serious injury would recur to UK producers across all 15 categories of steel if the safeguard measures were to be removed,” the TRA department said Feb 21.
TRA conclusions are based on the data provided to the TRA, the overcapacity in the global steel market, the risk of steel being diverted to the UK due to measures in other major markets and the attractiveness of the UK steel market, the TRA explained in its press note.
Safeguard measures are a trade defense instrument as a result of trade diversion and distortions in international trade, setting tariff-free quotas based on historical imports. Once quotas are exhausted, a 25% tariff applies.
“UK Steel is delighted that the TRA has recognized that steel safeguards are more than ever necessary to shield the UK from the inevitable trade diversion of all the surplus material that will be shut out of other key markets,” Gareth Stace, Director General of UK Steel, the association of UK steel producer, said Feb 21.
“Global excess steelmaking capacity of 630 million mt is a shocking 60 times the size of the UK market. Even a small proportion of this steel being diverted to the UK would completely overwhelm our market. Capacity is still growing, mostly state-funded and largely for high-emissions steel,” he said.
According to the association, the reasons why the UK’s steel safeguards were first introduced are not only still in place, but conditions have in fact deteriorated, with the “Trump era Section 232 tariffs continuing to deflect trade to exposed markets.” “In a year alone, global steelmaking overcapacity rocketed by 23% and continues to rise against a backdrop of high costs and weak steel demand.”
The steel safeguard measures were put in place in 2018, when the UK was still part of the EU, in response to US Section 232 tariffs imposed by the former president of the US, Donald Trump, causing trade diversion and excess capacity in global steelmaking. While the US has since agreed tariff-free quotas with some countries and regions, including the EU and the UK, most countries still face 25% tariffs when they export to the US.
The UK transitioned steel safeguard measures for 19 product categories in 2021, of which 15 were maintained. Following the TRA recommendation, the Secretary of State for Business and Trade, Kemi Badenoch, must decide ahead of June 30, 2024, whether to extend the safeguard measure for all or some of the product categories.
