Ministers fail to plug imported fabricated steel tariff gap

The Government has stopped short of closing a controversial loophole in its new steel tariff regime, prompting warnings that cheap imported fabricated steelwork will flood the UK market and put thousands of jobs at risk.

Ministers yesterday confirmed the final shape of the new safeguard measures ahead of their introduction on 1 July, after weeks of lobbying from the construction and fabrication sectors.

Under the plans, imported steel sections will face quotas and tariffs, but fabricated steelwork remains outside the regime.

The industry has repeatedly warned that overseas suppliers can make minor modifications to steel sections – such as attaching a plate or drilling a hole – and then ship them into Britain tariff-free as fabricated products.

Fabricators fear the anomaly will accelerate the offshoring of work and hollow out a sector employing around 60,000 people. The industry estimates up to 30,000 jobs could disappear over the next five to seven years if the measures remain unchanged.

The Government has, however, eased its original proposals following intensive industry pressure. From 1 July, tariff-free import quotas will be cut by 51% rather than the 60% reduction initially proposed. Any imports above quota levels will attract a 50% tariff.

Industry leaders welcomed the additional quota headroom but warned it did little to address the fundamental threat facing UK fabricators.

Jonathan Clemens, chief executive officer of the British Constructional Steelwork Association, said: “The changes announced today show that ministers have listened to at least part of the case made by industry.

“The additional quota headroom from 60% to 51% is a start but it’s far from the full package for which we’ve been campaigning.

“Specially for construction there has been some positive moves in the categories of sections, specifically those imported from the EU, tubes and hot rolled sheets.”

But he warned: “The continued failure to include fabricated steel leaves the constructional steelwork sector dangling over a precipice.

“UK fabricators are being asked to compete in a market where input costs are being pushed up, while overseas competitors can still ship fabricated steelwork into the UK without being caught by the tariff regime.”

The measures introduced by Government to support steel producers like British Steel are expected to drive up construction costs further.

Structural steel prices have already jumped from around £700 a tonne at the start of this year to about £1,000 a tonne today.

Industry sources predict the protection measures for UK steel will lead to a further increase of between 10% and 15% once the new regime takes effect.

The latest decision also comes despite warnings from Parliament’s Business and Trade Committee that excluding fabricated steelwork would create a “perverse incentive toward offshore fabrication”, encouraging imports while undermining domestic manufacturing.

Clemens added: “The United States and Canada have both recognised the danger of leaving finished and derivative steel products exposed, the UK Government needs to catch up immediately to protect British firms, British investment and British jobs.”

Ministers fail to plug imported fabricated steel tariff gap | Construction Enquirer News