Time Running Out On Steel Quota Cliff-Edge

The British Chambers of Commerce is calling on the government to change course on new steel quotas and tariffs which could decimate swathes of SMEs.

The BCC wrote to the Business and Trade Secretary, Peter Kyle, in May, to raise its concerns about the plans.

The letter said the proposed regime risks creating ‘real financial and logistical problems for downstream industries. These include construction, engineering and manufacturing, which rely heavily on imported steel products that can’t be obtained domestically.

The new system, which is set to be introduced on July 1, reduces tariff-free import quotas by 60% overall, significantly higher than the EU’s 47% reduction. However, some categories of steel are facing cuts of up to 90%.

At the same time, tariffs on imports above the quota limits are set to rise from 25% to 50%, creating a double hit for firms already grappling with high costs and fragile supply chains.

In its letter to the Business Secretary the BCC set out a series of recommendations to ease the burden of the changes. These included:

• Reducing the scale of quota cuts to align more closely with international partners
• Lowering or phasing in the planned 50% tariff rate above quota limits
• Extending transitional easements for existing orders from three months to at least 12 months
• Publishing a full impact assessment on downstream sectors
• Accelerating work towards a UK-EU agreement to remove tariffs on steel trade

The BCC received a response, but it failed to recognise the cliff-edge facing many businesses. And time is now running out to lay the statutory instrument in Parliament that will confirm the precise nature of the changes.

In the meantime, the Indian Government has paused implementation of its free trade agreement with the UK following concerns about the impact of the new quotas on its trade.

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.

“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.”

Read more latest news from the BCC here.

17.06.2026