Revisions related to Tata Steel's plans to close blast furnaces in Port Talbot

The UK’s Trade Remedies Authority (TRA) has initiated two reviews of existing safeguard measures on hot-rolled flat and coiled steel. This was reported on the British government’s website.

These are the suspension and review of the tariff rate quota (TRQ) for these products in response to the applications of Tata Steel UK and Kromat Trading Ltd. Both proceedings relate to Tata Steel’s recent proposal to close two blast furnaces in Port Talbot as part of the transition to EAF.

According to the TRA, if the new production plan is approved, it will significantly reduce Tata Steel’s domestic hot-rolled steel production capacity for a period of time and require more imports to meet demand in the UK market.

This will mean that the current level of import quotas for hot-rolled steel will be insufficient for the UK’s industrial needs. Additional imports needed to replace it will be subject to tariffs of 25% once the current quota is exceeded.

The production plan to be reviewed by the agency is the same as the one submitted by Tata Steel UK to the unions for formal consultation on January 19 this year. The TRA will conduct its review in parallel with this process.

«If a different production plan is proposed as a result of the consultation, the TRA will take this into account when making recommendations to the Secretary of State for Business and Trade,» the agency noted.

Preliminarily, the TRA believes that the safeguard measures on rolled steel should be suspended for nine months. At the same time, the TRQ review will determine whether it is advisable to change the method of quota allocation to allow importers to freely choose the source of imports. Currently, tariff quotas are assigned to countries based on traditional trade flows.

«These reviews are designed to prepare the current steel trade regime for the upcoming changes in Port Talbot. We want to avoid a situation where new imports needed to compensate for declining domestic production are subject to a 25% tariff, imposing additional costs on the UK economy,» said Oliver Griffiths, TRA Secretary General.

As GMK Center reported earlier, the UK plans to introduce a tax on imports of carbon-intensive products, including steel, by 2027 as an attempt to protect domestic producers from cheap imports from countries with less stringent climate policies.