British Chambers of Commerce warn over UK steel quota changes

The British Chambers of Commerce (BCC) has urged the UK government to reconsider planned changes to steel import quotas and tariffs, warning that the measures could have severe consequences for downstream industries.

In a letter sent to Business and Trade Secretary Peter Kyle in May, the BCC argued that the proposed regime could create "real financial and logistical problems" for sectors such as construction, engineering and manufacturing, which depend on imported steel products that are not readily available from domestic suppliers.

Under the new system, scheduled to take effect on July 1, tariff-free steel import quotas would be reduced by 60% overall, compared with a 47% reduction in the European Union. Some product categories are expected to face quota cuts of up to 90%. At the same time, tariffs on imports exceeding quota limits would rise from 25% to 50%.

The BCC has called for a softer approach, including smaller quota reductions, a phased introduction of the higher tariff rate, an extension of transitional arrangements for existing orders, and the publication of an impact assessment covering downstream industries. It also urged the government to accelerate negotiations with the EU aimed at removing tariffs on steel trade.

According to the business organization, the response it received from the government did not adequately address concerns about the potential impact of the measures. The BCC also noted that India's government has reportedly paused implementation of its free trade agreement with the UK amid concerns over the planned quota changes.

William Bain, head of trade policy at the BCC, said some companies could face "millions of pounds in additional costs" once quotas are exhausted. He added that several businesses had indicated they might be forced to relocate operations to the EU if the measures are implemented in their current form.

The BCC said it is seeking discussions with EU Ambassador Pedro Serrano to advocate for an agreement on dedicated UK quota shares within the EU system, while continuing to press the UK government to keep an extension of transitional easements under consideration.

Source: British Chambers of Commerce, Photo: Fotolia