The British Government’s sudden introduction of tariffs on imports of crude steel from Asia has triggered a major crisis in the sector. The Confederation of British Metalforming (CBM) emphasized that producers are facing high costs and delivery delays, and are preparing to file a lawsuit against the government.
Trade Secretary Jonathan Reynolds decided during the summer to reduce the amount of steel that could be imported duty-free from Vietnam and South Korea. Although the measure aimed to protect domestic producers from cheap imports, the fact that the sector was informed only 24 hours in advance sparked strong criticism.
The new regulation imposed a 25% customs duty on shipments that had already been paid for, leaving thousands of tons of steel waiting at UK ports. The CBM described the situation as a “tsunami of problems, with rising costs and logistical issues.”
According to The Guardian, Paul Whitehouse, Managing Director of Steel & Alloy Gonvarri Industries near Birmingham, stated that the additional tariffs would cost his company more than GBP 500,000: “We operate on very small margins. In a sector where profits are at 1-2%, this additional burden is a heavy blow.”
The measure came at a time when major producers like Tata Steel and British Steel were already facing difficulties. The sector was already searching for new markets due to a decrease in demand from the automotive and construction industries.
While the government defends its decision by saying it was based on the recommendations of the Trade Remedies Authority (TRA), the CBM has expressed that the policy was harsher than anticipated. The TRA had recommended that the duty-free import quota be limited to 40%, but Reynolds immediately implemented the decision and reduced the quota to 15%.
Stephen Morley, President of the CBM, stated that the accumulation of steel at the ports has led to additional costs and logistical bottlenecks, creating a “domino effect.”
Industry representatives support protecting domestic production but emphasized that the sudden implementation of the policy has put firms in an even more difficult position. It has been reported that CBM members have begun raising funds for a judicial review of the decision.
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