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Britain to retain Chinese steel tariffs in defiance of WTO rules

Anne-Marie Trevelyan - Reuters
Anne-Marie Trevelyan - Reuters

High tariffs on steel from China and other countries will be kept in place for a further two years even though the move puts Britain in breach of global trading rules.

The Government has announced it will roll over safeguards designed to limit subsidised cheap imports from abroad and ensure the future of the domestic industry.

In a statement to Parliament, Anne-Marie Trevelyan, the trade secretary, admitted the decision broke WTO commitments but said it was in the national interest.

Nations adversely affected by the policy will be able to hit British goods with tariffs equivalent to the economic value of the harm caused to them.

The move was welcomed by Tory MPs in Northern Red Wall seats where much of Britain’s steel is made, and has also been backed by Labour.

Ms Trevelyan told MPs there would be “serious injury or the threat of serious injury to UK steel producers” if current tariffs and quotas on imports were removed.

She said it was in the “vital public interest” to avoid that scenario and revealed she has been calling countries across the globe urging them not to retaliate.

‘It’s in economic interest of the UK’

“A strategic steel industry is of the utmost importance to the UK especially given the uncertainty of the political and economic waters we are currently all charting,” she told MPs.

“Given the broader national interest significance of this strategic UK industry and the global disruption to energy markets and supply chains the UK currently faces, we have concluded it is in the economic interest of the UK to maintain these safeguards.

“The Government has a duty to use its democratic mandate to the greatest possible effect to protect the interests of the British people and provide leadership in these challenging times.”

Britain rolled over the regime of EU steel safeguards, which set the tariffs and quotas applied to foreign imports, upon leaving the bloc in 2020.

The measures make it more expensive for companies to buy certain grades of the metal from abroad, but also protect domestic producers from unfair competition.

Ms Trevelyan said quotas on one type which isn’t made in the UK have been enlarged in response to concerns expressed by industry.

China has been repeatedly accused of “dumping” heavily state-subsidised steel on the global markets in an effort to drive Western suppliers out of business.

The Trade Remedies Authority, an independent watchdog set up to oversee post-Brexit policy, recommended ending the tariffs but they will now be extended until July 2024.

Tory MPs from Red Wall seats welcomed the decision as a “sensible approach” and “really great news for the steel industry”.

Holly Mumby-Croft, who represents Scunthorpe, said: “They have stood behind steel jobs … and made sure we have the right steel safeguards just as every other country does.”

Miriam Cates, for Penistone and Stocksbridge, added: “The safeguards will make sure the UK steel industry is protected from market distorting practices like dumping.”

Concern over ‘protectionism route’

But other Conservative backbenchers raised concerns the Government is ditching the party’s traditional approach to free trade.

“I never thought being a free trader in this party would be such a unique and rare position to hold,” said Anthony Mangnall, the MP for Totnes.

Peter Bone, who represents Wellingborough, added: “I do have concerns that we’ve gone down the protectionism route rather than cutting the energy costs.”

Mark Pawsey, the MP for Rugby, warned: “Tariffs operate against Conservative free market principles and carry the risk of retaliation.”

Several suggested the Prime Minister would be better to help steel producers by ditching his green policies and bringing down electricity prices.

A possible breach of the ministerial code?

But Ms Trevelyan insisted: “It is absolutely without question the right thing to continue to push forwards on our Net Zero agenda.”

She also dodged a question over whether knowingly discarding international law represents a breach of the ministerial code.

Boris Johnson’s former independent ethics adviser, Lord Geidt, resigned last month saying he had been put in an “impossible and odious position” by the policy.

The trade secretary said the policy had been agreed “collectively and with reference to the ministerial code noting the conflict” with WTO rules.

Answering a question from Tory MP John Penrose, she insisted she was “very confident” in the “balance that I have reached in deciding that this is the right course of action”.

“The Department for International Trade had no contact with Lord Geidt. Obviously the Prime Minister and his former adviser spoke on a regular basis on a number of matters,” she said.