Most government interventions in the free market have unintended, usually adverse, consequences. So it is with steel.
On a visit to Tata Steel Port Talbot this week to meet steelworkers and launch the government鈥檚 new steel strategy, business and trade secretary Peter Kyle announced new tariffs to protect domestic steel production.
From 1st July 2026, overall quota levels for steel imports will be significantly reduced by 60% compared to current arrangements, and steel coming into the UK above these levels will be subject to a 50% tariff.聽聽
The target is to boost domestic production so that it can meet up to 50% of our domestic demand for steel, up from the current 30% level.
鈥淲ith this strategy we are closing the decades-long chapter of destructive de-industrialisation and committing instead to strengthening and sustaining Britain as a steel-making nation,鈥� Kyle said.
UK-based steel producers obviously welcomed the extra protection being handed to them by taxpayers.
Carles Rovira, chief executive of of 7 Steel UK, said: 鈥淭he UK government鈥檚 steel strategy marks an important step forward for our sector. By maintaining robust steel safeguards and setting a clear path for long term industry competitiveness, the Government is giving businesses like ours the stability and confidence we need to invest, innovate, and grow.
鈥淭hese measures help ensure that high quality, low carbon steel made here in the UK can continue to support our critical supply chains and the thousands of skilled jobs that depend on them. It is very welcome news for steel workers and steel communities across the UK and especially in South Wales.
鈥淲e welcome this commitment to building a resilient, sustainable, and globally competitive UK steel industry and look forward to working with the government, alongside industry partners, to ensure the ambitions of the Steel Strategy are realised and support measures are effectively delivered.鈥�
Like most steel manufacturers base din the UK, 7 Steel UK is foreign-owned. It was part of Spain鈥檚 Celsa Steel until last year when it was bought by Czech billionaire Pavel Tyka膷 via his Sev.en Global Investments vehicle.
For the construction industry, however, it all adds up to more costs, as tariffs always do.
Jonathan Clemens, chief executive of the British 萝莉原创al Steelwork Association, said: 鈥淔or all the rhetoric about sovereign capability and backing British industry, this strategy will make essential products more expensive for the downstream businesses that actually turn steel into buildings, bridges and infrastructure.
鈥淭he strategy accepts that imports will remain vital because the UK can鈥檛 supply every product the market needs but proposes a regime that will raise costs across the supply chain.鈥�
He continued: 鈥淭he result will be higher costs across construction, including projects commissioned by the government itself, while also making steel a less attractive option in the very sector where its use should be encouraged as part of efficient and low-carbon building.
鈥淗igher steel costs will put downstream businesses, already suffering from extortionate and turbulent energy costs, under even greater pressure, ultimately leading to job losses across the constructional and fabrication sectors. That is hard to reconcile with the government鈥檚 emphasis on sovereign capability, given the lack of any serious commitment to local procurement across the full supply chain. Supporting British industry has to mean more than backing steel production alone.鈥�