UK to slash steel import quotas as ministers target bigger share for domestic producers

A new government steel strategy aims to lift the share of UK demand met by British-made steel from 30% to as much as 50%, with tougher import controls and up to £2.5bn in financing promised this Parliament

The UK will cut steel import quotas by 60 per cent from July and impose tariffs of 50 per cent on volumes above those limits, as ministers launch a new steel strategy aimed at expanding domestic production and shielding the sector from global overcapacity.

The government said yesterday it wanted British producers to supply up to half of the steel used in the UK, up from about 30 per cent now, in a move designed to strengthen domestic capability in infrastructure, defence and clean energy.

The new import regime will take effect from 1 July 2026 and apply to steel products that can be made in the UK.

Alongside the quota cuts, the government said it would raise the UK’s maximum Most Favoured Nation steel tariffs at the World Trade Organization to 50 per cent.

The measures were announced with a new steel strategy that also makes the National Wealth Fund the main vehicle for up to £2.5bn of financing for the sector during this Parliament.

Ministers said the package was intended to preserve steelmaking capacity that would otherwise face “real jeopardy”, leaving the UK more dependent on overseas suppliers for materials used in energy, defence and transport infrastructure.

Peter Kyle, the business and trade secretary, said: “Making steel in the UK is vital for national security, critical infrastructure and the wider economy.”

He added: “With this strategy we are closing the decades-long chapter of destructive de-industrialisation and committing instead to strengthening and sustaining Britain as a steel-making nation.”

The strategy confirms electric arc furnaces as the future direction of British steelmaking, continuing the shift away from blast furnaces towards lower-emissions production using recycled scrap.

It also opens the next round of Clean Industry Bonus applications to steel manufacturers through offshore wind developers, launches a cross-government group on scrap supply, and tasks the Steel Council with work on workforce needs, research and productivity.

The government said the new trade restrictions were not intended to halt steel imports, which it said would remain necessary for industry. Quota rules have been designed, it said, to preserve security of supply and limit disruption to the wider economy.

Following discussions with downstream industries, ministers said quotas would roll over quarterly within the year and the measure would be reviewed after 12 months.

The government is also exploring a transitional arrangement under which the new tariff would not apply to goods contracted before 14 March and imported between 1 July and 30 September 2026.

The strategy builds on earlier support for the sector, including £500m for Tata Steel’s £1.25bn transformation at Port Talbot, more than £100m in transition funding for local businesses and retraining, and government backing for a sales process for Speciality Steel UK’s sites in Rotherham and Stocksbridge.

The government said the steel industry employed nearly 40,000 people in 2024 and paid wages averaging 32 per cent above local norms.

Later on Thursday, ministers said UK Export Finance would back a £70m deal for British Steel to supply work on the refurbishment of two Nigerian ports during the Nigerian state visit.

Gareth Stace, director general of UK Steel, said: “Today’s strategy acknowledges the essential role steel plays in every part of the economy and sets out the direction needed to attract investment, boost innovation, and strengthen our industrial foundations.”

Charlotte Brumpton-Childs, GMB national secretary, welcomed the publication of a strategy but said “the devil will be in the detail”, including over the ownership of Scunthorpe and the future technology mix.

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