Secretary of State backs UK Steel proposals to tighten steel safeguards beyond TRA recommendation

24 June 2025

UK Steel’s recommendations to strengthen existing steel safeguard measures have been taken forward today after the Secretary of State stepped in at a critical time for industry.

The Secretary of State, Jonathan Reynolds, has again shown that he is on the side of British industry in following UK Steel’s recommendations to tighten the existing steel safeguards. This will be crucial to diminishing the injury that will be caused to domestic steelmakers by steel being redirected away from the US market in light of President Trump’s steel import tariffs.

In a letter to Nick Baird, Trade Remedies Authority Chair, Reynolds noted that in his intended decision, the Government has accepted UK Steel’s arguments to limit the liberalisation of the existing steel import quotas to 0.1%, down from 3.0% previously, in line with the measures taken by the European Union. The Government has also accepted UK Steel’s argument to implement a cap on residual quotas, preventing individual countries from dominating the quota and harming domestic producers.

The Business Secretary also intends to implement the Trade Remedies Authority’s recommendations to prevent unused quarterly quotas from being rolled over to the following quarter and prevent countries with a specific quota from accessing residual quotas in the final quarter, in line with UK Steel’s requests.

UK Steel Director-General, Gareth Stace, said:

“This is a tremendous outcome and a demonstration of the Secretary of State’s commitment to our industry. The measures will reduce the pressure of steel diversion from the US and EU and prevent countries that flood international markets with unsustainably cheap steel from swamping the UK and driving our steel manufacturers out of business.

“We now need to back the tightened safeguards up with a comprehensive new trade defence mechanism. This will help to develop the positive business environment our country craves and encourage private investors to enter the sector, ensuring we not only survive but thrive. The new mechanism, to replace the safeguards before they expire, should be introduced in January. The forthcoming Trade Strategy has the potential to deliver new legislation that will equip Government with the tools it needs to defend our companies from the subsidised steel that is currently flooding steel markets at unsustainable price levels.

“The Government has made the right decision today, in response to a tough trading environment where subsidised imports undermine domestic steel production.”

Contact details

Louise Young, Campaigns and Engagement Manager, UK Steel  07388 370176 | Lyoung@makeuk.org

TRA safeguard quota review:

• The review was prompted by a UK Steel application to the TRA in response to the implementation of US steel tariffs as well as the tightening of the EU’s equivalent measures, both increasing the trade diversion pressure onto the UK market.
• Safeguards in the UK have been in place since 2018 in response to US Section 232 tariffs being first introduced. Since then, these have been liberalised year after year as per WTO rules and are now 22% larger, all while steel demand in the UK has contracted by 16%. As a result, these quotas are oversized and ineffective in shielding the UK market from trade diversion.
• In its application to the TRA, UK Steel requested that UK quotas be tightened in line with the fall in domestic demand, but the UK’s trade remedies regulation is more restrictive than both the EU’s and what is required by the WTO.

The TRA proposed the following modifications to the UK’s safeguards quotas:

• 40% individual country caps under the “Other countries” quota for metallic coated sheet, plate and rebar, effective from October 2025 (instead of the requested 15% effective from July)
• Removal of carry-over of unused quota from quarter to quarter and removal of access to residual quota in the final quarter by countries with their own quotas
• The TRA did not accept UK Steel’s requests below when the EU has been able to make these changes, due to more restrictive UK legislation:
• Reducing the rate of liberalisation of the quotas from July
• Removing the portion of sanctioned Russian and Belarusian quotas that have been previously redistributed to other countries

The Secretary of State’s intended decision:

• Increase the overall volume of each category’s tariff-rate quota by 0.1% from 1 July 2025.
• Apply a 15% cap in the residual quota of category 4 and a 20% cap in the residual quotas of categories 7 and 13 to ensure that UK imports from exporting countries are more closely aligned with traditional trade flows, effective from 1 July 2025.

Amend the allocation of the tariff-rate quotas as below, in line with the recommendation of the Trade Remedies Authority:

• Prevent any unused quarterly quotas from being made available in the following quarter.
• Prevent WTO Members with a country-specific quota from being able to access the residual quota in the final quarter.
• Update developing country exemptions based on UK import data for the period 1 January 2024 to 31 December 2024 and in line with the WTO Agreement on Safeguards.

Global excess capacity:

• Global excess capacity was estimated at 602Mt in 2024 and is forecasted to reach 721Mt by 2027 – equivalent to more than 100x the UK’s production.
• Capacity expansions in Southeast Asia and the Middle East are continuing at an alarming rate – these are largely state-funded, mostly for high-emission blast furnaces and often do not correspond to domestic demand trends.
• Steel demand is weakening in key markets, notably China, translating into rising oversupply, which is dampening steel prices and spilling over into other markets.
• Import pressure on the UK market is on the rise amid a weak demand environment. The import share in 2024 already increased to 65% from 60% in 2022. The sharpest import increases came from non-EU sources, mainly India, Vietnam, China, South Korea, Turkey and Algeria. Importantly, these are also countries that have seen significant increases in imports from China or are within China’s top 10 exporting destinations.
• Over two-thirds of steelmaking capacity is in countries that have Net Zero targets later than 2060 or none at all.

UK Steel safeguards:

• Safeguards are a type of trade remedies measure intended to address unexpected surges in imports that are damaging or threatening to damage domestic producers. Safeguards can take various forms but the most common is a tariff-free quota – this allows the continuation of tariff-free imports at the same level or higher as the period before the safeguard was introduced.
• The UK inherited its steel safeguards from the EU which introduced its own equivalent measure in 2018 principally to guard against import diversion from the US after the introduction of Section 232 tariffs by President Trump. This mechanism expires under WTO rules in June 2026.
• The UK is only partially shielded from trade diversion expected to occur as a result of President Trump’s new 2025 25% steel tariffs. Steel safeguard quotas have been liberalised every year and are now 22% larger than when they were first introduced in 2018. All while UK demand has contracted by 16%.
• Even a small proportion of surplus material ending up in the UK would completely overwhelm the UK steel market. Most of these imports will be of high-emission steel.

EU steel safeguards review:

• The Commission reviewed its steel safeguards, resulting in tariff-rate quotas becoming more restrictive. The amendments took effect on 1 April.
• The Commission has reduced the liberalisation rate from 1% to 0.1%, limiting the amount of steel that can be imported into the EU tariff-free.
• Additionally, countries will no longer be able to use the entire volumes of unused quotas of other countries, including those of Russia and Belarus. The ‘carry-over’ mechanism, which allowed countries to roll over unused quotas to the next quarter, has also been eliminated for categories with high import pressure and low consumption.

EU Steel Action Plan:

• The European Commission unveiled its bold Action Plan for Steel and Metals on 19 March, which will deliver comprehensive measures to protect and strengthen the European steel industry. It will:
• Ensure an affordable and secure energy supply for the sector
• Prevent carbon leakage
• Promote circularity
• De-risking decarbonisation
• Protect quality industrial jobs.

About UK Steel: UK Steel is the trade association for the UK steel industry. It represents all the country’s steelmakers and most downstream steel processors. The UK steel sector:

• Produced 4Mt of crude steel in 2024 and supplied 30% of the UK’s annual demand of 8.1Mt
• Employs 36,800 people directly in the UK and supports a further 46,000 in supply chains
• The median steel sector salary is £39,245, 24% higher than the UK national median and 33% higher than the regional median in Wales, and Yorkshire & Humberside where its jobs are concentrated
• Directly contributes £1.7 billion to UK GVA and supports a further £2.2 billion
• Directly contributes £3.1 billion to the UK’s balance of trade
• 96% of steel used in construction and infrastructure in the UK is recovered and recycled to be used again and again

For further information about the steel industry, please see the 2025 press pack, Why the UK needs a strong steel sector or the 2025 UK Steel Key Statistics report.