Certain steel products moving from Great Britain to Northern Ireland face 25% tariffs after the EU changed its rules on steel quotas.
The EU rules change stems from the war in Ukraine and relates to the Northern Ireland Protocol, reports the BBC.
Industry body UK Steel has appealed to the government to suspend the tariffs immediately, reports the FT.
Gareth Stace, director-general of UK steel, said: “It is beyond farcical that UK producers are now prevented by these tariffs from selling goods to customers in their own country.”
Sam Lowe, trade director at consultancy Flint Global and writer at trade blog Most Favoured Nation, explained that, previously, steel could enter NI from Great Britain tariff-free – provided EU steel quotas remained unfilled.
However, in June the EU modified its rules on tariffs to take into account changes caused by the application of sanctions on Russia, post-invasion of Ukraine – whereby the EU no longer had access to cheaper Russian steel imports – removing the UK’s specific quota and putting it into a wider “other countries” section.
UK quota exhausted
Lowe said that the move was intended to give EU steel purchasers greater flexibility, since Russian steel was no longer available.
He explained: “Whereas before the UK had access to its own country-specific quota, which it could rely on to accommodate steel moving from Great Britain to Northern Ireland, now these movements would be covered by the ‘other countries’ quota which could fill up much more quickly, given the entire world has access to it."
The tariff quotas have reportedly already been hit, according to steel intelligence website Steel Orbis.
Richard Warren, head of policy at UK Steel, said: “Countries like Turkey are using up big chunks of the quota and there is none left for anyone else.”
The EU had previously rejected a request to increase the UK steel quota to take into account GB-NI trade.
The Daily Mail reports that steel manufacturers in the EU will continue to enjoy exporting tariff-free to the whole of the UK.
The Newsletter reports that Carla Lockhart MP, a member of the unionist DUP party, has written to chancellor of the exchequer Nadhim Zahawi, requesting that the government suspend the steel tariff.
“The impact of this tariff will be felt right across our construction sector,” she warned.
However, MP Stephen Farry, of the Alliance party, has called on the EU and UK to resume negotiations on the issue, calling it “a problem” for Northern Irish manufacturers who depend on steel imports from mainland Britain, as well as “an issue for Irish companies who source their steel via a UK supply chain”.