The government is set to introduce new tariffs on overseas steel to protect UK producers from a “flood of cheap steel” imports.
The Telegraph reports that Boris Johnson’s government will impose new “safeguard” import limits on several developing countries, while announcing a two-year extension of duties imposed on developed countries and China.
Tariffs and quotas
On the basis of a report from the Trade Remedies Authority (TRA), international trade secretary Anne-Marie Trevelyan has proposed a two year extension of tariffs and quotas on 15 categories of steel products, reports S&P Global.
The TRA has also advised Trevelyan that India, Tunisia, Vietnam and Turkey have all exceeded an imports quota for developing countries, meaning that they should also be subjected to the tariffs already applied to other states.
Sources said Brazil and South Korea could also be hit.
The Times reports that Trevelyan’s belief that supporting British steel through the tariffs was the right thing to do.
The move has also received positive support from industry including Gareth Stave, director general of UK steel.
“Today’s decision to maintain the UK’s steel safeguard in full once again shows that the government is backing Britain’s steel industry,” he said.
Stace also said that tariffs should only be used as an interim measure, however.
“It is vital we now work with partners like the EU and the US to address the underlying issues that are destabilising global steel markets,” he said. “Safeguards are not a long-term solution, and the goal here is a global market for steel where we all play by the same rules.”
Fear of retaliation
Senior government figures are concerned that imposing tariffs could lead to a trade war, however, with retaliatory measures being placed on UK exports such as whisky and cars.
They also worry that it will damage British manufacturers who rely on imported steel.
The measures will expose Boris Johnson to allegations that he is breaking international law – an allegation reportedly levelled at him by former ethics adviser Lord Geidt earlier this month.
Speaking at the G7 summit in Germany, Johnson said that the UK steel industry was finding it tough due to rising energy costs.
“I think it is reasonable for UK steel to have the same protections that other European, absolutely every other European economy does,” he said.
Shadow foreign secretary, David Lammy, said that Labour backed the decision to extend protections for domestic steel that were also in place in the US and the EU, reports the Guardian.