The British Chambers of Commerce (BCC) has urged the UK government to reconsider planned changes to steel import quotas and tariffs, warning that the measures could have severe consequences for manufacturers, construction firms and engineering companies that depend on imported steel products.
The business group said time is running out before the new regime is due to take effect on July 1, adding that many companies face significant cost increases and supply chain challenges if the plans proceed unchanged.
Industry concerns grow ahead of July implementation
Under the proposed system, tariff-free steel import quotas would be reduced by 60% overall, compared to a 47 percent reduction under the European Union's new steel trade regime. According to the BCC, some steel product categories could see quota reductions of as much as 90 percent. At the same time, tariffs on imports exceeding quota limits are scheduled to increase from 25 percent to 50 percent.
The BCC said these changes would particularly affect downstream sectors that rely on imported steel products that are not available from domestic suppliers.
BCC calls for policy adjustments
In a letter sent to Business and Trade Secretary Peter Kyle in May, the BCC proposed several measures to reduce the impact of the new regime.
The recommendations include:
- reducing the scale of quota cuts to bring them more closely into line with international partners,
- lowering or gradually introducing the planned 50% tariff rate,
- extending transitional arrangements for existing orders from three months to at least 12 months,
- publishing a full impact assessment on downstream industries,
- and accelerating negotiations on a UK-EU agreement to remove tariffs on steel trade.
Noting the government's response did not adequately address the challenges facing affected businesses, BCC warned that, without further adjustments, the proposed measures could place additional pressure on UK manufacturers already dealing with elevated costs and fragile supply chains.
Businesses warn of higher costs
BCC Head of Trade Policy William Bain said some companies could face millions of pounds in additional costs once quotas are exhausted. According to Bain, some businesses have indicated that they may be unable to continue operating under the proposed framework, while others have suggested they could consider relocating production to the European Union.
He also called for a comprehensive assessment of the impact on downstream industries and said a long-term solution would involve securing dedicated UK quota shares within the EU's steel quota system.
The BCC said it is seeking discussions with EU Ambassador Pedro Serrano to advocate for an agreement that would facilitate steel trade between the UK and the EU. According to the organization, such an arrangement could help reduce costs for UK industries that depend on steel imports from the European market.