U.K. Hikes Steel Tariffs to 50%

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Higher steel tariffs on imports have been introduced by the U.K. government in an effort to help the ailing sector survive.

New Steel Strategy 

The U.K. government has introduced new 50% tariffs on steel imports in an effort to protect its struggling steel industry. 

The government's Steel Strategy outlines a number of key measures, including that steel import quotas will be reduced by 60% with higher tariffs of 50% for any steel outside of the new quotas. The quotas were called a "vital step to protect U.K. steel production in the face of global steel overcapacity" and will apply to imported steel products that can be made in the U.K.. It also sets the "ambition" for up to 50% of steel used in the U.K. to be made in the U.K., up from around 30% today. The government admitted that the U.K.'s steelmaking capability "faces real jeopardy, leaving us reliant on overseas suppliers for materials essential to our energy security, defence and transport infrastructure."

Spending

The Government said it has committed to spending up to £2.5 billion (US$3.35 billion) of financing for investment in the steel sector during its term in office. The National Wealth Fund will be the government's main mechanism for providing the funding. Visiting Tata Steel in Port Talbot, Wales, U.K. Business Secretary Peter Kyle confirmed that of the target of 50% of steel made in the U.K., it expects 50% of that to be made in Wales. "Making steel in the U.K. is vital for national security, critical infrastructure and the wider economy," Kyle said. "Steel-making is a cornerstone of our modern industrial policy that deliberately focuses support for key industries, technologies, and strategically important sectors. With this strategy we are closing the decades-long chapter of destructive de-industrialisation and committing instead to strengthening and sustaining Britain as a steel-making nation." 

Steel Strategy Highlights

The new Steel Strategy also commits to: 

• Confirm electric arc furnaces (EAF) as the future of British steelmaking, continuing the shift from blast furnaces to cleaner, EAF-based production using recycled scrap to support net-zero emissions. 
• Enable offshore wind developers to include steel manufacturers in the next round of Clean Industry Bonus applications (launching this year) to maximise U.K. steel use in renewables. 
• Launch a cross-government working group to ensure a sustainable supply of scrap metal for U.K. steelmakers. 
• Task the Steel Council with action on workforce needs and practical research and innovation to boost productivity and competitiveness. 

Alongside the new trade measure being announced today, the Government will also be raising the U.K.'s maximum Most Favoured Nation (MFN) steel tariffs at the WTO to 50% to protect domestic industry in the long run from the impacts of global overcapacity. 

The Problem 

U.K steelmaking has been on the decline for some time and in recent years has seen the closure of key operations and the letting go of thousands of workers. The government has had to actively intervene on a number of occasions to save the biggest smelters. In 2023, Tata Steel U.K. received a £500 million (US$672 million) rescue package from the U.K. government after protracted negotiations. Industrial Info is tracking a £1.25 billion (US$1.7 billion) project to transform the U.K.'s largest steelworks, Port Talbot, into a green steel operation that Tata claims will reduce the site's carbon emissions by about 90%. Tata will move ahead with the closure of two blast furnaces at the site, where the company employs 4,000 people. Around 2,800 jobs will be lost in the transition. Industrial Info is tracking five Port Talbot projects worth more than US$2 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports. For additional information, see September 20, 2023, article - Tata Steel U.K. Gets $620 Million Rescue Package. 

In April last year the government enacted emergency powers to take control of Chinese-owned British Steel Limited (BSL), the country's second-biggest steelmaker. Claiming that owner Jingye Steel was planning to shut the steelworks, the government rushed through legislation to take control of the blast furnaces at Scunthorpe. That move came after the collapse of talks with Jingye to continue steel operations with the help of a £500 million (US$646 million) rescue package to overhaul and modernize the operations. For additional information, see July 29, 2025, article - Work Begins on Port Talbot Green Steel Project.

Key Takeaways

• The U.K. government has introduced new 50% tariffs on steel imports to protect industry.
• Calls for up to 50% of steel used in the U.K. to be made in the U.K., up from around 30% today.
• Industrial Info is tracking five major modernisation projects worth more than US$2 billion at the country's largest steelworks in Port Talbot, Wales. 

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