UK manufacturers decry tariffs, say steelmakers cannot meet demand

·2 min read
A worker cuts newly manufactured bars of steel at the United Cast Bar Group's foundry in Chesterfield

By David Milliken and Eric Onstad

LONDON (Reuters) - British manufacturers have called on the government to allow them to import more steel products without paying tariffs because domestic suppliers have failed to meet demand, leaving them facing 25% duties on a key raw material.

Since Britain left the European Union, imports of a type of steel used in vehicle parts and other manufacturing face a 25% tariff if they exceed a certain quota level as a 'safeguarding' measure to encourage domestic steel production.

The quota currently covers about a third of British manufacturers' usage, and the government has proposed doubling it in size, but manufacturers say this will still leave them short.

"Increasing the quota is a step in the right direction, but it is not enough to protect our members," said Steve Morley, president of the Confederation of British Metalformers.

British trade minister Anne-Marie Trevelyan is due to make a statement on steel tariffs to parliament later on Wednesday.

Small engineering company Tinsley Bridge, which makes stabiliser bars for heavy trucks such as those made by Volvo and Renault, cannot source the specialised steel it needs in Britain and must import, but has been hit with the 25% tariffs.

That has pushed up costs for the business which has turnover of 22 million pounds ($27 million) and 220 workers.

"We obviously can't absorb that. We've got to pass that on to our customers. What that is going to mean is that we're not going to be seen as a competitive source," said managing director Mark Webber.

The 25% tariffs on imports over the quota "raises the very real prospect of lost orders and production being moved away from the UK", the CBM said.

"British steel mills have not been able to supply the ... materials our members need to support critical domestic and export supply chains, nor are they likely to be able to do so in the near future," it said.

Britain proposed last week to extend tariffs and quotas on five steel products, with a final decision expected this week, aimed at supporting an industry that employs 34,000 workers and makes $2 billion in annual turnover.

Britain has a "strong argument" to support its steel industry, business minister Kwasi Kwarteng said on Tuesday.

The Sunday Telegraph said British Prime Minister Boris Johnson was seeking wider measures, including quotas on steel imports from emerging economies, in a bid to bolster support in industrial areas which had historically supported the opposition Labour Party.

($1 = 0.8212 pounds)

(Reporting by David Milliken and Eric Onstad;Editing by Elaine Hardcastle)

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