The UK steel sector is in collapse as I reported yesterday.Now the government is imposing 50 % swingeing tariffs on steel imports, doing grave damage to the steel using industries, claiming this will help domestic steel production.
If you look at what they are actually doing, it is geared to helping EU exporters of steel to grab a bigger share of our market as well as putting up costs of UK steel users who will still need tariffed imports.
The decision to prolong the life of the 2 70 year old blast furnaces at British Steel by public subsidy taken in 2025 may still result in due course in closure and maybe some replacement electric arc capacity but the government declines to clarify its plans.It means low levels of UK steel output for the year ahead as we await new electric arc capacity.
This means the output of the steel producing sector maybe around just £2bn whilst the imports may be running around £5bn. Meanwhile the government has decided to impose a tariff on a majority of imports of steel from non EU which is a large new tax on the costs of the steel using industries in the UK. Their latest publication (Department for Business and Trade UK’s steel trade measure from 1 July 2026) reveals a very distorted tariff policy that is unlikely to protect Scunthorpe much, leaving it very vulnerable to EU steel.
It is true that in accord with what seems to be their policy of trying to promote more EU exports to the UK to increase our trade dependence, they have allowed 3.2 m tonnes of imports to be tariff free, with 65% of this allocation going to EU steel producers. They have not extended similar treatment to members of the TPP or to India, where we also have tariff free trade deals which these tariffs override.The EU imports will displace dearer non EU imports up to the quota limits. The EU tariff free imports will likely exceed UK steel output.
The main steel using industries other than construction are vehicle manufacture, mechanical engineering and steel products. The turnover at risk in these industries is in excess of £200 bn. The tariff could bring in over £1bn of extra tax, imposing over £1 bn of extra cost in industries that often have thin profit margins. The government has not given us an estimate of how many jobs and how much profits tax these new taxes will lose us.
It is strange indeed to impose a tariff to try to protect £2b of turnover at the risk to damage to £200 bn of other business turnover. It is also mad to allow tariff free to the EU which is already a large steel exporter to us, whilst taking out other world competitors who might sell us better and cheaper product if they were also tariff free.
July 3, 2026
As you say. “It is strange indeed to impose a tariff to try to protect £2b of turnover at the risk to damage to £200 bn of other business turnover. It is also mad to allow tariff free to the EU which is already a large steel exporter to us, whilst taking out other world competitors who might sell us better and cheaper product if they were also tariff free.”
Not “strange” but insane, suicidal and economic lunacy.
But not really so “strange” as nearly all Labour policies are similarly insane, not thought through and suicidal – like net zero, benefits higher than wages, the attacks on non doms and private schools, rip off intermittent energy, over regulation of landlords, employers, free speech, health and safety, planning, bats, salmon, newts…over taxation of everything so people leave. Rigged markets in energy, healthcare, banking, education…
July 3, 2026
Low skilled immigration levels, benefits and houses to augment boat arrivals.
July 3, 2026
Agree, Government policies always seem to fail by not thinking about possible unintended consequences or taking into account human nature.
Once again politicians seem to think that the EU is our friendly neighbour, instead of realising they are picking our pockets whilst they talk nicely, and smile at at the same time.
We are being governed by fools !
July 3, 2026
@Lifelogic – ‘The Plan’
Some have one foot out the door and still cant stop lying
July 3, 2026
Labour acts like a wrecking ball, destroying so much of what they should be protecting.
Businesses duck down trying to avoid being crushed out of existence and stay down until the pendulum finally stops hitting them both ways.
Only Reform UK are strong enough to break the Labour chain tying us to the EU.
July 3, 2026
Risking £200bn of business turnover to protect merely £2bn with tariffs is indeed insane.
Labour also destroyed private schools as you indicate. Parents were already paying the cost of state schools via tax but not consuming their services as well as paying private fees from taxed income. Private education should have been encouraged as it reached higher standards and saved the state much money.
Now many children who were privately educated have been added to the state burden. Labour claimed they would provide more teachers to compensate, but instead they reduced them!
In 1980, Thatcher sensibly introduced the ‘Assisted Places’ scheme to alleviate the weight of fees on parents whose children attended private schools, but Blair cruelly rapidly abolished it in 1997. The idiotic ethos of Labour is deeply ingrained, widely causing harm.
July 3, 2026
The correct ideology would be that it should be a parents moral duty to pay for their children’s education if they can afford it so more money is available for the state eduction system for those who cannot afford it. The same of course applies to health care.
July 4, 2026
People ought to pay for all their responsibilities. Many shrug theirs and cause added charges to be imposed on others. We have a duty to assist folk in times of emergency and poor health, but not the lazy and reckless who intend to act like parasites throughout life.
July 3, 2026
As I keep saying John. All going to plan. Going the same way as ceramics, chemicals, aluminium etc. If, and it’s a big if, where is the electricity coming from to power these electric arc furnaces.
Because they operate on short, intense blasts of energy, they are very disruptive on the grid. Entirely unsuitable for wind and solar energy. These machines rely on inertia in the system to smooth the peaks.
Not a good idea.
July 3, 2026
exactly – reduce the power consumption of kettles, lights, irons, hairdriers, motors, pumps, air-fryers, microwaves, fridge/freezers etc.
A lower steady drain works better where inadequate power is available.
July 3, 2026
This happens because people can act against our interests with impunity.
It is not “the government”, it is individuals with an agenda and time to start identifying the chain of individuals responsible for such acts so they can be held accountable.
July 3, 2026
These misguided extra taxes on steel will also increase inflation with a knock on to higher interest rates and pension and benefit bills.
July 3, 2026
I just don’t get it. What is the rational counter argument to Mr Redwood’s outline? If you are going to put on tariffs, yet have a tariff free quota, then treat EU / TPP partners or indeed Canada or US compete for this quota. Or have free trade / no tariff at all. Or set a narrow tariff to focus specifically on Scunthorpe products with a very narrow time frame to allow them to get through a difficult period. But paying indefinitely to keep Scunthorpe sort-of open, but not sustainable economically, then picking winners from certain overseas partners but not others – etc seems completely the worst of all worlds.
July 3, 2026
This UK Parliament, and I say Parliament as they chose and support the direction the leadership is taking the Country, they seems hell-bent on destroying the Country and impoverishing its People out of malicious spite.
It is not even about changing direction, moving to a different path its pure unadulterated destruction. What sane person would ban the essential strategic, security and safety of the Nation before they had found a viable sustainable alternative? Only those seeking idealogical punishment of an entire Nation and its People
The sooner we are allowed to become a democracy and get rid of this diabolical Parliament the better
July 3, 2026
Will the government still use imported steel for public sector needs? After all the tariffs don’t apply to them.
July 3, 2026
The 50% tariff is simply a smoke screen enabling preferred EU imports because that is what Labour want. The government wants to align completely with the EU and is doing everything it can to stop non EU trading. Non EU trade would show the true uneconomic costs of being aligned to EU imports and policies on Net Zero. They want to hide that bitter truth.
The socialist go to policy, is always protectionism rather than allowing free market enterprise to naturally control costs and supply provision.
The effect of this latest anti world market policy will be to close down yet more manufacturing, sadly I believe that is exactly what Labour wish to do?
July 3, 2026
Perhaps this policy is driven by the “EU reset”
July 3, 2026
+1
July 3, 2026
I can’t see Starmer or Burnham standing up to the Chinese. Where the Chinese demand £1Bn whomsoever is in #10 will likely insist on giving them £2Bn – you know how they like to send our money to good causes abroad!
A government that dithers is of no use to us – this should all have been settled a long time ago. Red Ed knew very well that steel had to go – all the plans laid out were perfectly clear about this. Delaying the inevitable redundancies and the loss of a major industry should have been clearly signposted from the start of Starmer’s reign, but no they prefer to do things in the shadows – So much for open and transparent government.
July 3, 2026
I assume the EU demanded this as part of the price of agreeing to hold a meaningless re-set summit with Starmer, same as 12 years of fishing rights, and the concession they have apparently demanded and won on UK taxpayers subsidising EU students’ University fees. The UK Civil Service are the worst negotiators in the world – one unused lever they have is the £5bn of student loans given to EU students who have left UK and which are not being repaid.
July 3, 2026
I am a big fan of protectionist tariffs for a country’s strategic industries, this combined withe preferential public sector procurement should bring the economies of scale to make those industries sustainable.
What I find unacceptable is not imposing those same tariffs on EU imports. That is not protectionist for the UK and demonstrates where our civil service’s loyalties lie.
Th EU is not our messiah.
July 3, 2026
You are correct, Lord John. And it’s all becoming very silly, which of course is the result and the purpose of the Net Zero Strategy, enacted by PM May without a proper debate, without a vote and without a costing. And without a referendum. DESNZ say that “68% of the population say they support (slightly or strongly) government action to reduce climate change in the UK…” But what action is the population willing to accept and at what cost? Only 2% are prepared to accept higher heating bills (and presumably electricity prices), 20% for higher overseas travel (flight) costs, 30% for higher personal transport (driving) costs and 32% for higher prices on meat and dairy products. What would be the result of these polls if they were told in advance that according to Professor Gordon Hughes of the Renewable Energy Foundation the UK taxpayer has already funded £220bn in renewable subsidies (£8000/household) since 2002 (2024 prices) and is currently funding £26bn/year in Net Zero subsidies. In addition NESO say their Clean Power 2030 project will cost “over £40bn annually”. It is time we had a referendum on Net Zero so that the country can be told just how much this is costing and can then make its judgement on whether this cost is worthwhile rather than it be left to climate activists and judges.
July 3, 2026
There are so many things that are being destroyed by one means or another, that it really does feel that it’s all being done deliberately!
With my tin hat on, reading reports about such organisations as the Fabian Society, who are apparently working with the WEF and the EU and the UN – everything we see suddenly makes sense.
July 3, 2026
LOL, clowns at work again in their circus, aka the UK. Why can’t they merely cut the huge energy overheads they have dumped on all of our own industries, all in the name of “Net Zero”?
Do they actually understand anything about how a profitable business works? New PM, go against social pressures and admit you got it wrong, then do the right thing and increase your share of voting in the polls. Unfortunately for us, however, the spend, tax and borrow methodology is stuck in the socialist DNA.
July 3, 2026
Are you surprised? When you have a government of incompetents, this is what you get. Steel is a basic industry and should be properly supported, but this government has not got a clue.
Most of them could not run a bath, let alone an important industry. In everything they say and do, harming the UK is the No 1 priority.
July 3, 2026
Off Topic.
I read ‘Getting your steps in has long been linked to better health – and for the first time the NHS-backed scheme will start giving people rewards for doing exercise. Early next year, NHS England will launch a “marathon a month” challenge, asking people to walk for around 30 minutes a day. Those who do it every day will hit roughly 26 miles a month – the distance of a marathon. Users will be able to log their walks online, or through their phone or smartwatch.
And the NHS says those who complete the challenge will then be eligible for rewards – which could include incentives and discounts.
May I suggest a prize might be a guaranteed face to face appointment with a GP for 10 minutes within 1 week of the prize awarded?
July 3, 2026
“The UK steel sector is in collapse as I reported yesterday. Now the government is imposing 50 % swingeing tariffs on steel imports, doing grave damage to the steel using industries, claiming this will help domestic steel production.”
This is all part of the Net Zero Strategy plan to impoverish and destroy our national security for socialism depends upon making and keeping people poor.
Premeditated Industrial Destruction?
By Catherine McBride OBE, David Turver & Brian Monteith:
How the UK destroyed its industry and a plan to reverse this:
https://gbbc.uk/uk-deindustrialisation-energy-policy/
How can we stop Net Zero?
July 3, 2026
the cost of electricity lies at the heart of heavy industry.Quite simply “green,net zero” is LaLa Land given our prevailing climatic conditions.Our balance of electricity exports/imports via the inteconnectors is a deficit
of £2.5 billion(who pays?) later this year our NIreland compatriots will see their domestic electricity bill reduced
by about 20%?Eire/NI matching.So the Moyle link will be lossmaking.
Last figures available the USA INCREASED it’s fossil fuel production by 3.4%.Put the question to your MP but
don’t expect an answer.Mine certainly doesn’t
July 4, 2026
The aim is to persuade the EU to forgive Britain for its betrayal of ever closer union by subjugating Britain to the EU economically and by aligning UK to EU rules so the country can crawl back in by the back door. Starmer has always been clear that he wants UK to be so close to the EU there is no difference. Burnham will be as bad as Starmer or worse. And the public, unbelievably, would support re-joining. The power of propaganda.