The British Chambers of Commerce (BCC) has warned that planned changes to the UK’s steel import quota and tariff system could significantly increase costs for manufacturers and create major disruptions across industrial supply chains.
In a letter sent to Peter Kyle, UK Business secretary, the BCC argued that the proposed measures risk causing “real financial and logistics problems” for downstream industries including construction, engineering, and manufacturing. Business groups warned that higher steel costs could encourage offshoring of manufacturing, increased imports of finished products, and sourcing from lower-cost overseas suppliers.
Under the new system scheduled to take effect on July 1, the UK plans to reduce tariff-free steel import quotas by 60 percent overall, as SteelOrbis previously reported, exceeding the European Union’s recently announced 47 percent reduction. Some steel product categories reportedly face quota cuts of up to 90 percent.
At the same time, tariffs on imports exceeding quota limits are set to increase from 25 percent to 50 percent, substantially raising costs for companies dependent on imported steel products.
Manufacturers warn of major cost increases
According to the BCC, many UK manufacturers rely on imported steel grades that are not available from domestic suppliers. Industry representatives warned that the proposed changes could add millions of pounds in additional costs, reduce international competitiveness, delay production, and disrupt existing supply chains. Some firms reportedly indicated they may need to halt production entirely if specialist steel products become unavailable or prohibitively expensive.
Manufacturers also warned that the measures could undermine the UK’s climate and industrial policy objectives. According to the BCC, companies may be forced to purchase cheaper steel from less sustainable overseas sources if access to competitively priced imported steel becomes restricted. This could negatively affect domestic industrial investment, supply chain resilience, and net-zero transition efforts.
Businesses call for policy adjustments
The BCC proposed several measures to reduce potential disruption, including:
- reducing the scale of quota cuts,
- phasing in the proposed 50 percent tariff increase,
- extending transitional easements for existing contracts,
- publishing a full impact assessment,
- accelerating negotiations on a UK-EU steel trade agreement.
The organization urged the government to rebalance the policy framework to support the entire steel ecosystem rather than only domestic primary steel production.