The UK government will halve the amount of tariff-free steel imports allowed in an attempt to counter a global oversupply of cheap Chinese metal and boost its beleaguered local industry.
New “safeguards” will be introduced on 1 July and will coincide with similar new limits being introduced by the EU for the same purposes.
At the same time tariffs on steel imports above the duty-free quotas will be doubled to 50% of the product’s value.
The quotas replace existing pre-Brexit rules that set import levels across the EU. The UK had retained the rules after leaving the bloc.
Under the new rules, the existing quota of tariff-free steel allowed into the UK will be reduced by 51%, less than the 60% reduction proposed in March. That means only 3.2m tonnes can be imported duty-free into Britain in future.
Business secretary Peter Kyle said: “This steel trade measure – including today’s finalised quota volumes – has been designed to both protect UK steel making from global overcapacity, while giving businesses across the supply chain the certainty they need.
“We will continue to engage with industry and review the measure after 12 months.”
The government will also exempt manufacturers using 11 specific types of steel from tariffs after pleas from industry that import duties would cripple them as no local alternative supply exists.
There are 28 types of steel in the safeguards ranging from steel bars used to reinforce concrete in construction to rolled sheets used in stainless steel sinks and aeroplanes.
The UK produces about 3m tonnes of steel a year compared with the world’s supply of nearly 2bn tonnes.
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UK Steel, the industry trade body in the UK, has said previously that without these dramatic measures the British industry faced an “existential threat”. However, steel users in the UK had protested that the quotas risked raising prices of many products that were not available from Britain’s few remaining furnaces.
British steel’s biggest export market is the EU, and negotiators have spent the last three months trying to thrash out a deal with EU representatives in talks in Geneva, the headquarters of the World Trade Organization.
Government and EU sources say the overcapacity globally is caused by subsidised industries in China and other countries. When demand drops domestically in China, excess steel then finds its way into export markets, undermining local industries.