Britain has extended steel tariffs for a further two years to protect its ailing industry, the government said on Wednesday, in breach of World Trade Organization commitments.
Trade Minister Anne-Marie Trevelyan justified the decision with “global disruptions to energy markets and supply chains”.
“A strategic steel industry is of paramount importance for the UK, particularly given the uncertainty of political and economic waters that we are all charting at the moment,” Trevelyan told Parliament.
“Commercial remedies are one of the ways the government can protect its businesses.
“They address issues of dumping, unfair government subsidies or… give companies time to adjust to unforeseen import increases,” the minister added.
The UK’s energy-intensive steel sector, already suffering from cheap Chinese imports, is now facing skyrocketing production costs as fuel prices soar.
Tariffs imposed on developed countries and China on certain categories of steel products have now been extended until June 2024.
“It is in the UK’s economic interest to maintain these safeguards to reduce the risk of material damage if they are not complied with,” Trevelyan told lawmakers.
After Britain left the European Union, the country extended quotas and tariffs on 10 steel products until mid-2024.
The UK has now decided to extend the temporary safeguards for “a further two years” for five more categories, Trevelyan said.
“I have come to the conclusion that if the safeguards for the five additional categories were lifted at this stage, serious harm would be done or threatened to be done to UK steel producers,” the minister added.
– WTO violation –
Wednesday’s decision puts the government on a collision course with the WTO.
“The decision to extend the safeguards to the five product categories departs from our international legal obligations under the relevant WTO agreement,” admitted Trevelyan.
Prime Minister Boris Johnson said on Sunday the government must make “tough decisions” to support the production of steel, which is heavily used in construction.
Johnson’s political standing is in jeopardy after two crushing defeats in by-elections last week.
One was in the former industrial town of Wakefield, a northern England seat which had switched to the Conservatives in the previous general election.
The government hopes measures on steel will boost support in such areas, observers say.
The British steel industry has been severely decimated in recent decades and former state-owned British Steel is struggling to survive in the face of international competition.
The country’s remaining producers include Indian-owned Tata Steel.
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