Boris Johnson imposes steel tariffs to win back Red Wall

·5 min read
Boris Johnson, under mounting pressure over his leadership of the Conservative Party, is gambling on the move being backed by Labour - Dan Kitwood/Pool via Reuters
Boris Johnson, under mounting pressure over his leadership of the Conservative Party, is gambling on the move being backed by Labour - Dan Kitwood/Pool via Reuters

Boris Johnson will risk fresh allegations that he is breaking international law this week as he imposes sweeping new steel tariffs as part of an effort to win back support in Red Wall seats.

The Prime Minister is preparing to hit several developing countries with new “safeguard” import limits designed to protect UK manufacturers from a “flood of cheap steel” from overseas.

At the same time, ministers will announce a two-year extension of steel tariffs already imposed on developed countries and China.

The moves, being finalised for an announcement this week, will expose Mr Johnson to allegations that he is breaching World Trade Organisation rules in order to protect the British steel industry.

They are the changes cited by Lord Geidt, the Prime Minister’s former ethics adviser, when he quit earlier this month and said he was put in an “odious position” of being asked to “license” a breach of the ministerial code, which requires ministers to abide by international law.

But Mr Johnson, under mounting pressure over his leadership of the Conservative Party, is gambling on the move being backed by Labour – which has previously pushed for steel tariffs – and winning support among Red Wall voters and MPs.

A Number 10 source said: “We will act in the national interest.”

Some senior government figures are also concerned that imposing tariffs on further developing countries could lead to a trade war, with retaliatory measures applied to UK exports such as whisky. They also worry that it will damage British manufacturers who rely on imported steel.

A government figure opposed to the extension of tariffs said: “This is going to screw the economy. It is a total violation of the WTO rules. The Prime Minister said he had recognised that we have to govern as Conservatives, but this is anti-Conservative, anti-free market and anti-capitalist.”

The move has been informally agreed by key Cabinet ministers, but final details will be signed off in the coming days. Friends of Rishi Sunak, the Chancellor, said he is “instinctively anti-protectionist” but understands the desire to protect UK jobs and industry.

Red Wall Conservative MPs have been lobbying Mr Johnson to impose the measures amid fears that a “glut” of steel from abroad is severely undermining British firms.

Tata Steel, the UK-based metals giant with production sites in Hartlepool and Corby, has told ministers that if imports “continue to flow into the UK at [the] same pace, let alone grow, it may cause irreparable damage to the UK industry”. It has accused “certain developing countries “of abusing their position”.

The move comes amid growing anger among Tory MPs over the party’s by-election losses in Wakefield and Tiverton and Honiton. Many backbenchers and ministers now fear for their seats and are considering another attempt to oust the Prime Minister.

In other developments:

  • Mr Johnson claimed he was making plans for three terms in Downing Street – meaning he would remain Prime Minister until the mid 2030s.

  • A poll suggested voters are turning on the Government and the Bank of England over the cost of living crisis, with almost one in three saying excessive public spending is “significantly” to blame for high inflation.

  • Writing in The Telegraph, Damian Green, the influential leader of the One Nation Conservatives caucus, warned that the Government was becoming “ineffectual” in helping with voters’ “day-to-day lives” and urged the Cabinet to “[show] leadership qualities”.

  • In another article for The Telegraph, David Davis, a former Brexit Secretary, attacked Mr Johnson for claiming that the only policy change demanded by his critics is to rejoin the EU’s single market. “The biggest policy difference is that we want our Government to stop talking about tax reductions and actually deliver them,” he wrote.

  • Therese Coffey, the Work and Pensions Secretary, used an interview to announce that benefits claimants will have to work longer hours in order to be released from job centre visits, under a crackdown devised with Mr Sunak.

Steel products fall into 19 categories, all of which were protected by anti-dumping safeguards until last summer to keep out cheap competitors. Last year, the Trade Remedies Authority (TRA) recommended scrapping these safeguards on nine products.

Following a battle with Kwasi Kwarteng, the Business Secretary, who is in favour of the safeguards, Ms Truss, who was then Trade Secretary, decided to ditch the protections on only four categories, which are not mass produced in Britain.

Now, with those protections due to expire this week, the TRA has advised Anne-Marie Trevelyan, Ms Truss’s successor, that there is “evidence that supports a conclusion that extending the safeguard measure where possible at individual product category level is necessary to prevent or remedy serious injury or threat of serious injury to UK producers”.

The TRA has also advised Ms Trevelyan that India, Tunisia, Vietnam and Turkey have all exceeded an imports quota for developing countries, meaning that they should also be subjected to the tariffs already applied to other states, for some categories of steel. Sources said Brazil and South Korea would also be hit.

Ms Trevelyan’s “proposed approach” is set out in a government document that states: “The Secretary of State has taken into account the TRA’s findings and concluded that the maintenance of TRQs [tariff rate quotas] is necessary to remedy serious injury. The Secretary of State also recognised that adjustments were required to certain TRQs to better reflect trade flows.”

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