The UK government has announced a new steel strategy aimed at stabilizing and rebuilding the domestic steel sector, introducing stronger trade protections and financial support measures. The strategy includes a new steel trade measure with tariffs of up to 50 percent, alongside funding of up to £2.5 billion to support the industry and attract investment.
The government stated that its initial goal is to restore domestic production levels to around 40-50 percent of UK demand, compared to about 30 percent in 2024. The strategy outlines a long-term vision of a competitive and decarbonized steel industry, supported by investment and improved operating conditions.
New trade measures
A key element of the strategy is the introduction of a new tariff rate quota system, which will replace the current steel safeguard when it expires in June 2026.
Under the new system:
- quota volumes will be significantly reduced by 60 percent compared to existing safeguard levels,
- additional product categories will be covered,
- an out-of-quota tariff rate of 50 percent will apply.
The measure is scheduled to come into force on July 1, 2026, and is designed to ensure the continued viability of domestic steel production.
Financial support and investment measures
The plan includes up to £2.5 billion in support to rebuild and modernize the industry, alongside broader financing tools such as the National Wealth Fund.
The government also highlighted existing interventions, including support for Tata Steel’s transformation at Port Talbot, intervention to maintain operations at British Steel, and investment in Sheffield Forgemasters.
According to the strategy, UK steel demand is expected to grow in the coming decades, driven by sectors such as construction, infrastructure and clean energy. The government stated that this creates opportunities for new investment, including in areas where domestic production capacity is currently insufficient.
Commenting on the new strategy, the UK-based trade association UK Steel said, “The Steel Strategy is a significant step forward in securing a competitive, resilient future for our steel industry. The bold trade measures announced send a clear signal that the UK is prepared to act in the face of global overcapacity and heavily subsidized steel distorting international markets. For too long, UK steelmakers have been competing on an uneven playing field, with domestic market share falling to around 30 percent. These measures are a necessary and proportionate response to ensure that UK industry can compete fairly and continue to support critical sectors from defense to energy and infrastructure while taking back critical market share.”
