EU cuts tariff-free UK steel import quotas by nearly a quarter

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LONDON — The EU announced Tuesday it will cut tariff-free import quotas for U.K. steel by nearly a quarter of last year’s volumes, with new 50 percent tariffs applying above those quotas.

Britain’s steel industry said the cuts mean that the U.K. “will lose a significant chunk” of the 1.7 million tonnes of finished steel it exported to the EU under existing safeguards, which were due to expire at midnight.

About 70 percent of British steelmakers’ exports go to the EU.

U.K. steelmakers are now pushing British ministers to continue negotiations with Brussels to realize more generous country-specific quotas.

“Our priority is providing the best possible outcome for the U.K. steel industry, which is why we have engaged tirelessly with the EU and will continue to work to strengthen U.K.-EU steel trade long-term,” said Business and Trade Secretary Peter Kyle.

The EU announced earlier its new regime of steel protections that will reduce its tariff-free import quotas overall by 47 percent and double tariffs from Wednesday. The U.K. announced its own new system of quotas and similar tariffs last week, with generous allowances for EU imports.

Both the U.K. and the EU are introducing new protections to guard against Chinese overproduction and a glut of cheap steel that distorts international market prices.

The U.K.’s new quotas represent a smaller reduction than those imposed on countries without preferential trading relationships with the EU, equivalent to a 22 percent reduction from last year’s volumes.

The EU struck agreements on steel tariff-rate quotas with 13 partners, including the U.K., Türkiye, the Republic of Korea, Indonesia, Egypt, Brazil, Switzerland, North Macedonia, South Africa, Argentina, Ukraine, Singapore and India.

The U.K.’s country-specific tariff-free quotas total about 1 million metric tons. This rises to 2.14 million tons when shared quota pools offered to FTA partners are factored in.

“We will need some time to analyse the specific details of the announcement with respect to different product categories,” said Rajesh Nair, chief executive officer of Tata Steel UK, pointing out the new quotas mark a 60 percent cut to products the U.K.’s largest steelmaker exports to the EU under guaranteed tariff-free quotas.

“Given the importance of the EU market to British steel producers, fair and workable market access remains critical if we are to achieve a sustainable steel industry here in the UK,” Nair said.

The pools are, however, likely to be quickly filled by countries with larger production, according to UK Steel.

“There is further work to be done by the Government as U.K.-EU reset talks continue,” said UK Steel’s Director-General, Gareth Stace.

“Securing wider export access for certain high-value steel products will be critical for the long-term viability and profitability of the U.K. steel sector,” Stace said. “The U.K. and EU are interdependent markets, and we hope both sides will take a reasonable view of each other’s needs as discussions take place over the coming months.”

This article has been updated.