June 16, 2024

Tariffs on steel imports from China and other countries are to be extended for another two years, the UK government has announced, admitting the move risks breaching World Trade Organization (WTO) rules.

Anne-Marie Trevelyan, the international trade secretary, said the government was acting in the “public interest” and to protect “thousands” of jobs. She said Ukrainian steel would be exempted from tariffs.

The decision comes less than two weeks after concerns over the tariffs were raised by Boris Johnson’s former ethics adviser Lord Geidt.

Plans to safeguard the UK steel industry “depart from our international legal obligations” but are in the “national interest”, Trevelyan said.

She admitted: “The government wishes to make it clear to parliament that the decision to extend the safeguards [tariffs] on the five product categories departs from our international legal obligations under the relevant WTO agreement.

“However, from time to time, issues may arise where the national interest requires action to be taken, which may be in tension with normal rules and procedures.”

Many steel factories are in “red wall” constituencies such as Scunthorpe and south Wales that are critical to the government’s general election prospects.

Yet the decision has been condemned by free market supporters, with Anthony Mangnall, the Conservative MP for Totnes, saying that he supported the steel industry but “not through protective measures”.

“I never thought being a free trader in this party would be such a unique and rare position to hold,” he said. “What message is this meant to send to Australia, New Zealand, Singapore, Japan or any other country we are signing a free trade agreement with when we end up citing national interests over the agreements we have signed?”

The government decision will see the extension of existing tariffs on five categories of steel until June 2024 to dovetail with the expiry date of tariffs on 10 other categories of steel, including gas pipes and railway material.

Gareth Stace, the director of trade body UK Steel, welcomed the intervention, saying it showed the government was backing the industry. The move would guard against surges in imports that would have “risked jobs, investment and our ability to transition to net zero”, he said.

Nick Thomas-Symonds, the shadow international trade secretary, said the move would be “welcome relief” to the steel industry and ensure a level playing field in the face of cheap imports.

But, he said, the extension of tariffs “in no way makes up for the shortcomings in support for the steel industry from this government”.

He also expressed surprise that the government was extending tariffs in a way that could put it in breach of WTO rules.

“If there is to be a challenge of the WTO, it will be a mess entirely of the government’s own making,” he said.

He called on the government to publish the full Trade Remedies Authority analysis that led to the advice.

Geidt cited the plans to extend the tariff regime as a matter of concern in his letter of resignation 12 days ago. He wrote: “I was tasked to offer a view about the government’s intention to consider measures which risk a deliberate and purposeful breach of the ministerial code. This request has placed me in an impossible and odious position …

“The idea that a prime minister might to any degree be in the business of deliberately breaching his own code is an affront. A deliberate breach, or even an intention to do so, would be to suspend the provisions of the code to suit a political end. This would make a mockery not only of respect for the code but license the suspension of its provisions in governing the conduct of Her Majesty’s ministers.”

Although he subsequently clarified his remarks, saying the issue was a “distraction” from his real reasons for resigning, Geidt told the Daily Telegraph the tariff policy proposal “was simply one example of what might yet constitute deliberate breaches by the UK of its obligations under international law”.

Trevelyan added that after “additional analysis” of the impact of tariffs by the Trade Remedies Authority, the government had “concluded that it would be serious injury or threat of serious injuries if the safeguard on five additional categories of steel were to be removed at this time”.

Tariffs were imposed initially as part of an EU “safeguarding” measure in 2018 during Donald Trump’s dispute with China and were reimposed last year by the UK post-Brexit.

They applied to 15 categories of steel products, including railway material and gas pipes, but five of the tariff categories were due to expire on Thursday with the remainder due to expire in June 2024.

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UK to impose steel import tariffs for another two years, government says