The government’s agency for preventing unfair trade practices has suggested removing restrictions on the import of specific steel products following the closure of blast furnaces in Port Talbot.
The Trade Remedies Authority, responsible for safeguarding UK businesses against unfairly traded imports, has recommended that the business secretary, Kemi Badenoch, consider suspending safeguarding measures on hot-rolled flat and coil steel imports for a temporary period of nine months.
One month after Tata Steel announced plans to close the final two blast furnaces at its Port Talbot steelworks in south Wales, resulting in over 2,800 job cuts, the decision was made.
Following the verdict, Tata and the British steel importer Kromat appealed to the TRA to review the possibility of halting the safeguard measures. These restrict the quantity of goods that can be imported into the UK without tariffs, with any imports beyond that threshold being subject to a 25% tariff.
The shutting down of blast furnaces will greatly decrease the amount of hot-rolled flat and coil steel that can be manufactured in the UK, potentially causing a shortage and exceeding import limits.
The CEO of TRA, Oliver Griffiths, stated that these evaluations aim to ready the existing steel trade regulations for potential modifications in production at Port Talbot.
“We aim to prevent a scenario in which the UK economy incurs additional expenses due to new imports being subject to a 25% tariff in order to compensate for decreased domestic production.”
The TRA proposed that because Tata was the only producer of these goods in the UK, it was improbable that increasing imports would significantly harm UK producers.
Tata plans to construct four environmentally-friendly electric arc furnaces at the Port Talbot location. However, these furnaces will only have the capability to handle recycled steel and the construction process is expected to take up to four years.
The TRA has stated that it is conducting its reviews simultaneously with the discussions between Tata and the trade unions. If a new production plan is reached, it will consider this in its recommendation to the government.
The Trade Remedies Authority has implemented practical steps, according to William Bain, who leads trade policy at the British Chamber of Commerce. He believes that these measures should consider changes in domestic production and the impact on the economy’s access to steel.
According to James Selka, the head of the Manufacturing Technologies Association, the decision is beneficial as long as the UK does not plan to manufacture it in the future. However, he also stressed the importance of UK production for the security of future supply chains.
He stated that it is crucial to continue steel production in the UK in order to support the government’s advanced manufacturing plan. This plan aims to revive UK manufacturing after ten years of decline.
“Production of steel is crucial for maintaining a strong supply chain.”
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The TRA has initiated a examination of the tariff-free allowance for hot-rolled flat and coil steel in the upcoming period. This review is expected to be completed before the nine-month anti-dumping suspension expires and will serve as a replacement for that policy.
Hot-rolled flat and coiled steel is one of 15 categories of steel that have safeguarding measures in place but are due to end on 30 June.
The TRA proposed this week that the government continue to protect these items for an additional two years.
According to Chrysa Glystra, who manages trade and economics policies at UK Steel, any alterations to the availability of safeguard category one (hot-rolled coil) within the UK are limited to this particular category and do not affect the overall necessity for safeguards in the country.
The original reasons for their introduction are still relevant today, specifically concerns about trade being redirected due to US section 232 tariffs and the increasing excess capacity in global steel production.
Source: theguardian.com
