New steel tariffs are meant to 'back British industry' - not put 30,000 people out of a job

In reality, they do the opposite by distorting the market they aim to support. Ironically, the tariffs worthwhile intention risks putting companies off using UK-made steel altogether.

From 1 July, ministers will sharply cut the volume of certain steel products that can be imported tariff free - including specialist sections that UK manufacturers do not produce in sufficient quantities - and then impose a punitive 50% tariff on anything above those reduced quotas, up from where they currently stand at 25%. On paper, that sounds like protection, but in practice, it is a blunt instrument aimed at the wrong target.

Many of the products caught by these tariffs are not even made in the UK, but fabricators still need them to deliver projects - from much needed infrastructure to commercial developments. Penalising these imports does not create a domestic industry overnight; it simply drives up costs for British firms operating in an already fragile market with tight margins.

At the same time, the policy leaves a gaping loophole. While raw steel faces tariffs, fabricated steelwork does not, creating a perverse incentive and discouraging the purchase of British-made steel. Simply buy foreign steel, have it fabricated overseas, import and install it, all tariff free.

Work that could and should be done in the UK is instead offshored - along with the jobs, investment and skills that go with it.

We are already seeing the impact. The UK imports over 100,000 tonnes of fabricated steelwork each year - worth more than £500 million and supporting thousands of jobs - and these proposals risk accelerating that trend.

Faced with higher input costs at home but cheaper, tariff-free fabricated alternatives from overseas, contractors will make rational choices to protect their bottom line. They will buy the most competitive product, which, if these tariffs come into play, will increasingly not be British.

This is the core flaw at the heart of the Government’s approach. It assumes that protecting steel at the border automatically supports the domestic industry, but steel is not used in isolation. It is part of a complex supply chain - one that includes fabricators, contractors and end clients.

A government that champions engagement and consultation is overlooking growing calls for change from stakeholders who have not only provided compelling evidence but have also offered to work collaboratively towards a solution.

If you make UK fabrication uncompetitive, you shrink the domestic market for UK steel, and that is exactly what these tariffs risk doing.

The situation is compounded by a disconnect between policy ambition and industrial reality. Government projects are increasingly specifying low-carbon steel, typically produced in electric arc furnaces. Yet no UK producer can currently supply many of these products.

So British firms are squeezed on all sides: forced to pay more for imported materials they cannot source domestically, while competing against overseas suppliers who face no such burden.

It should therefore come as no surprise that the end result will be fewer orders for British-made steel.

Up to 30,000 jobs across the structural steelwork supply chain are now at risk if these measures go ahead unchanged.

These are skilled, well-paid roles in communities that depend on this industry. As the steel industry, and many others across Britain knows all too well, once those skills are lost, they will not easily return – and the economic consequences can run for decades, for generations.

The Government has been warned repeatedly that its intention - to strengthen UK steelmaking and secure sovereign capability - is understandable, and laudable. But good intentions do not compensate for flawed design.

A smarter approach would align tariffs with reality: exempting products not made in the UK, closing the loophole on fabricated steelwork, and ensuring procurement policy matches what domestic producers can actually realistically deliver.

Without that, the UK risks undermining its own supply chain in the name of protecting it.

Ministers must act before this becomes a self-inflicted wound - one that drives work offshore, weakens demand for British steel, and leaves the very industry they aim to defend in a weaker position than before.

Markets and businesses do not base their decisions on patriotism, but in cold, hard, pragmatic capitalism – they will simply go elsewhere.

---

Jonathan Clemens is Chief Executive of British Constructional Steelwork Association

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us, email opinion@lbc.co.uk