At least half of the steel used in Britain will be made in the country under a new government strategy for the struggling sector. This is a “watershed moment”, said Sky News, and, in “economic and historical terms”, it’s “dynamite”.
What are they?
The government’s “ambition” is to raise the proportion of domestically produced steel from the current record low of 30%, said the Department for Business and Trade. The new strategy proposes a new tariff on many steel imports and a reform of quotas on those imports. Imported steel quotas will be reduced by 60%, and anything brought in above that level will be subject to a 50% tariff.
Up to £2.5 billion will be given to steel producers that have effectively been nationalised and to support private steelmakers around the UK in their quest to produce lower-carbon metal.
Why are the tariffs so important?
These are “probably the biggest increases” in trade barriers imposed by a British government in “at least a generation”, said Sky News. Other countries, “most glaringly” the US under Donald Trump, have raised many of their tariff barriers, but Britain had “held firm”. For many ministers, it was a “matter of national pride”, because they “felt that to raise tariffs, even in an environment where everyone else was, would be an abomination”. But now, Britain is “dipping its toes into the waters of protectionism”.
Will they work?
A leading HS2 contractor has warned that raising tariffs on foreign steel imports will “exacerbate” cost pressures for the UK construction industry. With energy costs rising and an already depressed construction sector, the move is “ill-timed and unhelpful”, Mark Reynolds, chair of construction company Mace, told The Guardian.
But Gareth Stace, director general of UK Steel, has argued that “with global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives”.
|
