The Government has today accepted the Trade Remedies Authority’s (TRA) recommendation to vary the tariff rate quota (TRQ) on imports of Category 1 steel products. These changes will come into effect from 1 October 2024.
As a result of the reduction in domestic production of Category 1 steel, the TRA proposed that the steel safeguard measure be varied by duplicating Category 1 to form Categories 1A and 1B:
- The quota for Category 1A, which will be accessible by parties looking to import the products for commercial applications, will be retained at current levels.
- The quota for Category 1B, which would be accessible solely for downstream processing, will be set 132% higher than that of 1A.
- Taking Category 1A and Category 1B together, the total Category 1 quota will be approximately 3.3 million tonnes per year.
The Category 1B quota will also be allocated on a global basis to allow companies to establish reliable supply chains for domestic processing, along with a cap of 40% to ensure no single country’s exports dominate this new quota.
The import allowance under Category 1A equates to just over 1 million tonnes annually; and under Category 1B, to around 2.3 million tonnes annually. If these volumes were exceeded, importers would need to pay the 25% tariff.
Suspension review
In February, the TRA initiated a suspension review alongside the TRQ review in response to applications from Tata Steel UK (TSUK) and Kromat Trading Ltd. Both reviews responded to TSUK’s intention to shut down its blast furnaces in Port Talbot, Wales, as part of a transition to an electric arc furnace.
At that time, it was the TRA’s initial view that the TRQ review would take longer to complete than the suspension review and that the safeguard measure on Category 1 steel imports should be temporarily suspended to cover the period until the TRQ review was completed.
However, due to the complexity of the reviews, a final decision on suspending the measure could not be taken before the TRQ review concluded. As a result, the Secretary of State for Business and Trade has asked the TRA to reassess its suspension review recommendation in light of the decision on the TRQ review.
The TRA has published its original suspension review recommendation alongside the Secretary of State’s request to reassess that recommendation. Interested parties and contributors are now invited to provide views on the reassessment and have until 13 October 2024 to do so.
Notes to editors:
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The TRA is the UK body that investigates whether trade remedy measures are needed to counter unfair import practices and unforeseen surges of imports.
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Trade remedy investigations were carried out by the EU Commission on the UK’s behalf until the UK left the EU. A number of EU trade remedy measures of interest to UK producers were carried across into UK law when the UK left the EU and the TRA has been reviewing each one to assess whether they are suitable for UK needs.
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Safeguard measures are one of three types of trade remedies – along with anti-dumping measures which counter goods being ‘dumped’ into countries at prices below their normal price in their country of origin and countervailing measures against countervailable subsidies – that are allowed under World Trade Organisation (WTO) rules.
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Safeguard measures are emergency actions responding to increased imports of particular products, which cause serious injury to the importing country’s domestic industry. They apply to all imports (with some exceptions), rather than being focused on imports from particular countries. They impose duties when imports exceed a level reflecting traditional trading patterns.
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Category 1 steel is commonly used as a raw material for other types of steel and makes up almost a third of all steel production globally.
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Downstream processing refers to the use of an original product, in this case hot rolled flat steel, to produce commercialized steel products to be sold to the public.
