UK steel industry faces EU tariff threat amid rising costs

Commenting on the European Commission’s proposal to impose tariffs of 50% on steel imports, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, says: “The European Commission’s proposal to impose a 50% tariff on steel imports worldwide poses a significant threat to the UK steel industry. The EU accounts for around 75% of UK steel exports, so these tariffs risk cutting off access to the UK’s largest and most strategically important market at a time when the sector is already under pressure from global competition and rising energy costs.”

She adds: “Despite the UK Government securing quarterly tariff-free quotas for certain steel categories, there remains uncertainty around which products are covered and how long these exemptions will last. This uncertainty will create a ripple effect across other industries including construction, automotive, real estate and energy, all of which rely on stable supply chains and access to raw materials. In addition, while steel accounts for just 0.1% of UK production, it is strategically important for overall productivity, particularly in growth-driving industries responsible for delivering housing and infrastructure.

“Manufacturers have already weathered the storm of US tariffs, but given the value of UK steel exports to the EU market, this will have a far greater impact. The sector is already grappling with energy costs that are roughly 50% higher than EU averages, while continuing to face competition from Chinese exports flooding the global market. Without guaranteed access to the EU and robust domestic protections, UK steelmakers risk becoming uncompetitive in an industry that is increasingly reliant on government support.”

“The government’s Industrial Strategy includes a dedicated steel strategy aimed at recovery and growth, but these proposals are far from conducive and could be the tipping point for steelmakers. It is therefore key that the government maintains its commitment to UK manufacturing and actively engages in negotiations with EU counterparts to secure fair trading conditions. With the forthcoming Autumn Budget, the industry will also be looking for targeted financial and policy support that safeguards the UK’s position as a global competitor and ensures energy costs remain manageable.”