Britain’s largest industry body has sounded a fresh alarm over incoming government steel tariffs, warning that manufacturers are approaching a damaging cliff edge.
The British Chambers of Commerce said new duties on foreign-produced steel will force some businesses to the wall and cause severe harm to the broader UK economy.
William Bain, the BCC’s head of trade policy, said: “The cliff-edge on these plans is fast approaching so the opportunity is narrowing to avoid huge self-inflicted damage to the economy.”
Bain added: “Affected sectors rely heavily on imported steel products that can’t be obtained domestically, and some will be facing millions of pounds in additional costs when quotas are exhausted.”
From July, the government will slash the quota of tariff-free steel imports by an average of 60 per cent, while doubling the import duty on all steel beyond that threshold to 50 per cent.
Ministers argue the move will help shore up Britain’s struggling steel industry, which has been under pressure from sky-high energy costs and rising trade barriers in key export markets.
The quota on some individual steel products will be reduced by as much as 90 per cent, a scale of change that industry groups say is unworkable for downstream manufacturers including carmakers and construction firms.
This is the BCC’s second intervention on the issue in as many months, following a letter in May from director general Shevaun Haviland to business secretary Peter Kyle demanding an urgent meeting.
In that letter, Haviland warned the tariffs had the “potential to create significant financial and logistical problems for downstream sectors using steel” and called on Kyle to reconsider the most extreme quota reductions.
The BCC subsequently met with ministers and officials to discuss the incoming changes, but said those meetings “failed to recognise the cliff-edge facing many businesses.”
Both the European Union and the United States have dramatically ramped up tariffs on steel in the past year, each seeking to protect their own domestic industries from global oversupply.
The Indian government has also paused implementation of its free trade deal with the UK, citing concerns about the impact of the new steel quotas on bilateral trade.
A government spokesman said: “We want a thriving steel sector in the UK, which is why our new trade measure aims to strike the right balance between protecting domestic production and maintaining a secure supply.”
The spokesman added that the government continues to take feedback from industry and is separately engaging with the European Union to find a solution that protects vital steel trade and secures the best possible deal for UK producers.