The UK government has announced it will double tariffs on foreign steel to 50% in a bid to protect domestic producers from collapse. The new measures, unveiled by Business Secretary Peter Kyle during a visit to Tata Steel's Port Talbot plant, aim to increase domestic production by 30% and ensure that half of all steel used in the UK is made domestically, with half of that produced in Wales.
From July, quotas on imports of many overseas steel products will be slashed by 60%, and duties outside those quotas will be raised to 50%. The move comes weeks after Tata Steel warned the government it had just two months to save its operations in south Wales. The new £2.5bn strategy is designed to counter what Kyle described as 'unfair competitive behaviour' from other countries, particularly China, which is the world's largest steel producer and saw exports hit an all-time high in December.
The UK's current steel safeguards, which date back to before Brexit, expire on 1 July. The new measures align the UK with recent moves by the US, EU and Canada, which have also raised tariffs in response to a glut of Chinese steel. The EU has proposed doubling its tariffs to 50% and halving quotas with third countries, including the UK. Both sides are expected to seek carve-outs with each other featuring lower tariffs as they unite against cheaper Chinese imports.
The strategy is an attempt to protect what remains of the UK's steel industry after decades of contraction. The last blast furnace at Port Talbot closed in 2024 after Tata received a £500m rescue package to transition to electric arc furnaces, resulting in 2,800 job losses. Work has begun on the new, greener furnaces, which are expected to go online in 2028. Alasdair McDiarmid, assistant general secretary of the trade union Community, described talks with ministers and Tata executives as 'positive and productive', adding that the government was 'following through' on promises.
First Minister of Wales Eluned Morgan called the new strategy 'good news for our steel communities'. However, concerns remain over energy prices and the future of British Steel's Scunthorpe plant, which was taken into public control last year after its Chinese owner threatened closure. A National Audit Office report estimated the taxpayer bill for saving the plant could exceed £1.5bn by 2028. Kyle declined to comment on the report, stating only that the government was discussing the issue and that blast furnaces would continue until the companies themselves decided to transition.
