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British Chambers of Commerce (BCC) has warned that time is rapidly running out for the Government to rethink sweeping changes to steel import quotas and tariffs, amid fears that large parts of the UK’s manufacturing supply chain could be severely disrupted.
In a letter sent in May to Business and Trade Secretary Peter Kyle, the BCC raised concerns that the proposed regime could create “real financial and logistical problems for downstream industries”, particularly in construction, engineering and manufacturing, which rely heavily on specialist steel products that are not available from domestic producers.
The new system, due to come into force on July 1, would reduce tariff‑free import quotas by 60% overall – a significantly steeper cut than the European Union’s 47% reduction. Some categories of steel are facing even sharper reductions of up to 90%, raising alarm among businesses dependent on imported supply.
At the same time, tariffs on imports above quota limits are set to double from 25% to 50%, creating what the BCC describes as a “double hit” for firms already contending with elevated costs, fragile supply chains and ongoing economic uncertainty.
The business group has urged ministers to ease the impact of the changes by scaling back quota reductions in line with international partners, phasing in higher tariffs more gradually, and extending transitional arrangements for existing orders beyond the current three‑month window. It is also calling for a full impact assessment on downstream sectors and faster progress towards a UK‑EU agreement to remove steel tariffs.
While the BCC has received a response from the Government, it says the reply fails to acknowledge the severity of the situation facing many businesses. With limited parliamentary time remaining to finalise the statutory instrument needed to implement the changes, the organisation warns that the window for action is narrowing.
Adding further complexity, the Indian Government has paused implementation of its planned free trade agreement with the UK amid concerns about how the quota changes could affect trade flows.
William Bain, Head of Trade Policy at the BCC, said: “The cliff‑edge on these plans is fast approaching so the opportunity is narrowing to avoid huge self‑inflicted damage to the economy.
“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. Some businesses have told us they will not be able to continue, while others have said they will have no choice but to relocate to the EU.”
Mr Bain added that greater clarity is urgently needed. He said: “A full impact assessment on downstream sectors is now essential. The long-term solution must be for the Government to reach an agreement on dedicated UK quota shares with the EU, as part of its new quota system. This would reduce the costs for industries in the UK which have to import steel from the EU.
“We are currently seeking a meeting with the EU Ambassador Pedro Serrano to push the case for this agreement. But in the meantime, the Government must keep an extension to transitional easements on the table.”
The BCC is urging ministers to act quickly before the deadline to prevent what it describes as a damaging and avoidable shock to UK industry.