Concerns Raised Over UK Steel TRQs

The introduction of new UK steel tariff-rate quotas (TRQs) due to come into force on 1 July 2026 is raising growing concern across parts of the UK manufacturing sector, with warnings that the scale and pace of the measures could create significant unintended consequences for downstream manufacturers.

The revised measures form part of the Government’s wider steel strategy and are intended to support the long-term viability of UK steel production following increasing international trade pressures.

In recent years, global steel markets have experienced significant disruption linked to international tariffs, trade protections and oversupply concerns. In particular, increased US import tariffs and wider trade restrictions have raised concerns regarding the diversion of steel volumes into UK and EU markets, placing further pressure on domestic steel producers.

At the same time, UK steel manufacturers continue to face major commercial challenges linked to global competition, energy costs and long-term production sustainability. The revised TRQ structure is intended to encourage greater use of domestically produced steel by substantially reducing tariff-free import allowances on steel product categories manufactured within the UK.

Under the revised measures, substantial reductions in tariff-free import quotas will apply alongside increases in out-of-quota tariffs on a range of steel product categories.

The issue has attracted growing trade press attention, including front-page coverage in Motor Transport on 28 April 2026 and further coverage in Commercial Motor on 30 April 2026, reflecting wider concerns emerging across parts of the UK manufacturing and transport sectors.

What Are The New Steel TRQs?

Tariff-rate quotas (TRQs) are a trade mechanism which allow a limited volume of imports to enter the UK tariff-free or at a reduced tariff rate. Once those quota volumes are exceeded, significantly higher tariffs apply.

Under the revised measures due to take effect from 1 July 2026, quota volumes for several steel product categories have been substantially reduced, while out-of-quota tariffs will increase from 25% to 50%.

According to published Government information and industry data, some quota allocations have reduced by more than 95%.

For example, industry data indicates that tariff-free quota for merchant bar imports from the EU has reduced from 35,073 tonnes to 1,113 tonnes — a reduction of approximately 96.8%.

In practical terms, steel products previously imported within commercially viable quota volumes and unaffected by tariffs are likely to exceed the revised quota allocations from 1 July 2026, becoming subject to the full 50% out-of-quota tariff.

Further information regarding the measures can be found via the following official Government publications and announcements:

• UK steel industry backed by major new trade measure and strategy – Government announcement outlining the wider UK steel strategy and proposed trade measures affecting imported steel products.
• UK Steel Strategy – Written Statement – Official Parliamentary statement summarising the Government’s intended approach to steel trade protections and industrial policy.
• UK’s steel trade measure from 1 July 2026 – Department for Business and Trade publication setting out the revised tariff-rate quotas (TRQs), quota allocations and affected steel categories.
• Taxation (Cross-border Trade) Act 2018 – UK legislation providing the legal framework enabling trade remedies, tariffs and quota measures.

Manufacturing Concerns

Don-Bur uses significant tonnage of raw steel materials within its manufacturing operations, including rolled coil, flats and other structural steel products.

The company states that it is already seeing rapid increases in steel pricing and increasing difficulty securing forward quotations from suppliers ahead of the implementation date.

David Burton, Managing Director of Don-Bur, commented:

“We recognise and support the objective of maintaining a viable UK steel sector. However, the scale and pace of the proposed changes risk creating significant unintended consequences for UK manufacturing.”

Don-Bur has raised concerns that the revised TRQ structure could significantly restrict access to imported steel while UK production capacity remains limited. In practice, this risks creating a captive domestic market where UK steel prices may rise towards parity with tariff-affected imported steel, regardless of underlying production costs.

The company also notes that many UK manufacturers operate within highly competitive sectors where long-term customer relationships and pricing stability remain critically important.

Don-Bur states that it remains committed to protecting its customer base as far as reasonably possible. However, if steel prices continue to inflate significantly as a result of the revised TRQ structure, wider market pricing adjustments across the manufacturing sector may become unavoidable.

Competition, Imports And Demand Migration

The revised TRQ structure is intended to support UK-produced steel by making affected imported steel products less commercially attractive. However, in the long term, Don-Bur believes the measures may unintentionally encourage manufacturers to reduce exposure to the affected tariff commodity codes by adapting material specifications and procurement strategies.

In practice, this may encourage manufacturers to:

• Substitute affected steel products with alternative materials outside the tariff commodity codes
• Procure steel derivatives, semi-finished products and fabricated assemblies attracting lower tariff exposure
• Shift more value-added manufacturing activity outside the UK before import

Don-Bur argues that these are commercially rational responses to the revised pricing structure. However, the overall effect may be counter-intuitive to the policy’s intended objective by reducing long-term demand for UK-produced steel and encouraging greater reliance on imported products and fabrications.

Potential Wider Impact On UK Manufacturing

The concerns being raised are not isolated to a single business.

The Staffordshire Chambers of Commerce and the British Chambers of Commerce have both raised concerns regarding the potential impact of the measures on downstream manufacturing businesses, particularly around the pace of implementation and the effect on manufacturers reliant on imported steel supply routes.

Don-Bur states that it supports the objective of maintaining a viable domestic steel industry but believes further consideration should be given to:

• A more phased reduction in quota levels
• The scale and timing of tariff increases
• The scope of the measures across steel products, derivatives and assemblies

Ongoing Industry Engagement

Don-Bur confirms that it will continue engaging with MPs, industry bodies, suppliers and Government representatives as discussions surrounding the implementation of the measures continue.