UK metals companies have warned of legal action against the government over new tariffs on raw steel imports from Asia, claiming the move has caused a “tsunami” of problems for the domestic industry.
Earlier this summer, Business Secretary Jonathan Reynolds cut the quota of raw steel that can be imported tariff-free from Vietnam and South Korea. The decision, intended to protect UK steelmakers from cheaper imports, left thousands of tonnes of already-paid-for shipments subject to a 25% tariff from July.
Industry Anger Over Sudden Quota Cuts
In a letter to Reynolds, manufacturers accused the government of giving just 24 hours’ notice before the new cap took effect, leaving shipments stranded at UK ports and significantly raising costs. The Confederation of British Metalforming (CBM), which represents companies that forge, weld and roll steel into industrial products, said the sudden policy shift created widespread disruption across supply chains.
Paul Whitehouse, managing director of Steel & Alloy Gonvarri Industries near Birmingham, estimated his firm alone faced over £500,000 in tariff surcharges. “The government has shot itself in the foot,” he said. “We work on very small margins — 1% to 2% — and these extra costs matter.”
UK Steel Sector Under Pressure
The UK’s main raw steel producers include Tata Steel in south Wales and British Steel’s Scunthorpe plant, now under government control after concerns about Chinese owner Jingye’s operations. Speciality Steel UK (SSUK), part of Sanjeev Gupta’s Liberty Steel Group, is also at risk of closure.
The broader steel industry has been hit by falling demand from the automotive and construction sectors. Car production has slowed in the UK, while commercial construction has weakened in 2025, leaving producers struggling to secure buyers.
TRA Recommendations Ignored
The government said its decision followed recommendations from the Trade Remedies Authority (TRA). However, industry groups argue Reynolds went further than advised. The TRA had suggested capping tariff-free imports from “other” countries, including Vietnam, Thailand and South Korea, at 40%, with implementation expected in October. Instead, Reynolds slashed the cap to 15% and imposed it overnight.
Stephen Morley, president of the CBM, said steel was being stockpiled at ports, creating a domino effect of rising costs, logistical problems, and uncertainty for firms already struggling in a fragile economy.
Legal Challenge Looms
CBM members are now preparing a judicial review against Reynolds’s decision, having sent a pre-action protocol letter. The Department for Business and Trade declined to comment, citing the possibility of ongoing legal proceedings.
