Ministers are expected to drop some planned tariffs on foreign steel after UK manufacturers said the measures would significantly increase their costs.
Representatives of the Department for Business and Trade are meeting leaders of steel trading business groups on Wednesday and Thursday with a view to finalising details of a reprieve for certain industries.
The government announced in March that it was doubling tariffs on steel imports to 50% and reducing quotas by up to 60% in an attempt to save UK producers.
The new tariffs and quotas must be in place by 1 July when the current safeguards, negotiated while the UK was still part of the EU, expire.
The UK is also fighting to mitigate a similar reduction in quotas and increase in tariffs being planned by the EU for that date, as both sides opted to limit imports to protect their own industries against cheaper imports from China, Vietnam and elsewhere.
The British government already announced a three-month reprieve or “transition period” on import duties for the steel buyers, and some say this could be extended to 12 months. Others say it is more likely that the government will formalise tariff exemptions for specific sectors and companies that import steel not produced domestically.
UK Steel said it had submitted “comprehensive proposals” to remove certain steel commodities from the tariff list to protect industries that could not source those products at all, or in sufficient quantities, in the UK.
“We understand other sectors have done likewise to inform the government’s final policy and we continue to have extensive discussions with impacted manufacturers,” a spokesperson said.
About 70% of the UK’s steel is imported; the government safeguards are aimed at reducing that figure to 50%.
Gareth Stace, the director general of UK Steel, said it was vital that ministers struck a balance between protecting the broader manufacturing sector and the steel plants facing the EU tariff threat.
He said the provisional safeguards were already having the desired effect of increasing domestic supplies, with “steelmakers ramping up capacity, creating jobs”, and more announcements of “mothballed capacity returning to production in the near future”.
William Bain, the head of trade policy at British Chambers of Commerce, said: “We’ve had an unprecedented response from companies across the UK about the serious negative impact on costs of quotas and tariffs on construction, manufacturing and engineering. That case has been put to the government, which has been listening, and we await to see what the full and final proposals would be.”
The business secretary, Peter Kyle, has raised with the EU the separate question of protecting British steel manufacturers from what they fear will be “devastating” quota reductions imposed by the bloc.
He told reporters in Brussels last Friday that some of the new steel safeguards were “disruptive” but that it was important “to protect domestic markets”.
A spokesperson for the Department for Business and Trade said: “We want a thriving steel sector in the UK, which why our new steel trade measure aims to strike the right balance between protecting domestic production and maintaining a secure supply.
“We always said we would take feedback from industry about the measures and conduct a review after 12 months to ensure it remains effective and that’s exactly what we’re doing.”
