Published by:Holly Chant<>,Malvick Ong<>
2 Jul 2025 @ 10:13 UTC

The UK government has tightened steel safeguard quotas beyond the recommendations of the Trade Remedies Authority (TRA), in a bid to protect the domestic industry. The measures took effect on Tuesday, July 1, following an announcement by Business and Trade Secretary Jonathan Reynolds last week.
The TRA had recommended on May 13 that limits be introduced on how much of the unallocated tariff-rate quotas (TRQs) could be used by a single exporting country — a proposal the government has now implemented with even stricter controls.
Under the initial recommendation by the TRA, a residual quota of 40% was to be placed on Category 4 (metallic coated sheet), Category 7 (non-alloy and other alloy quarto plates) and Category 13 (rebar).
According to trade association UK Steel, products with larger residual quotas such as hot-dipped galvanized (HDG) steel, plate, and rebar, are particularly vulnerable to diverted trade.
The association reports that over half of HDG imports under the ‘other countries’ category originated from Vietnam, 66% of plate from South Korea, and 78% of rebar from Algeria.
These shares are significantly higher than the residual quota caps proposed by Reynolds, with a 20% cap given for the HDG category dominated by Vietnam, and 15% for the plate and rebar categories dominated by South Korea and Algeria.
We know this is a tough time for steel producers which is why this government is using every tool available to ensure the long-term success of our vital steel industry, protect jobs and deliver on our plan for change, Reynolds said.
A tariff-rate quota (TRQ) covers a three-month period and allows for a certain volume of imports within each category of steel to be imported into the UK tariff-free. Once the tariff-free volume is used up, all future imports for that period are subject to a tariff of 25%.
The UK’s steel safeguard measures, which apply to 15 product categories, are temporary and set to expire in June 2026, in line with World Trade Organization (WTO) rules that prohibit further extensions beyond that date.
Following the comments made by the business and trade secretary, the UK’s Department for Business and Trade issued a press release for a six-week Call for Evidence from stakeholders across the steel supply chain on June 26, according to the UK government website.
Calls for tighter regulation received backing from UK Steel, whose Director General Gareth Stace said that the government has made the right decision today, in response to a tough trading environment where subsidized imports undermine domestic steel production.
The Call for Evidence forms part of the UK government’s wider efforts to support the steel sector.
It follows a series of major interventions, including a £500 million ($687 million) grant announced in September 2024 in partnership with Tata Steel to install an electric-arc furnace at the Port Talbot steelworks, and a £2.5 billion investment to rebuild the industry, unveiled in February this year.
The UK government opted to go beyond the TRA’s recommendation in order to strengthen the effectiveness of its steel safeguards for domestic producers, a spokesperson told Fastmarkets. No further action from the TRA is expected at this stage.
Market responses to new trade measures The safeguard has long been priced in by the Vietnamese galvanized coil industry, which has seen extremely poor export sales due to the numerous trade defenses against their products in various countries.
“There is typically a $20-30 per tonne price gap between bids from the United Kingdom and offers from Vietnamese galvanizers, so it is hard to work deals,” a trader source told Fastmarkets.
The loss of this market exacerbates the bearish market situation for hot-rolled, galvanized and coated coil producers in Vietnam, which have been struggling to find buyers in both the domestic and export markets.
Major domestic HRC producer Hoa Phat Steel lowered its offer by $9 per tonne for domestic deliveries and export cargoes on July 1, which market participants took to be a sign of increasing pressure to offload volumes.
The announcement drew mixed reactions from market participants on its potential impact on Vietnamese steel scrap.
A Singapore-based trader told Fastmarkets that this could result in some negative spillover onto demand for steel scrap in the near-term, given it is a raw material to produce steel.
I don’t foresee this affecting scrap imports much for Vietnam, a second Singapore-based trader told Fastmarkets.
If most of the steel exported by Vietnam to the UK last year were flat steel products, it would not have much impact on “scraps [which] mostly goes to [make] long steel products,” he added.
UK steel producers welcome new measures Meanwhile, UK steel producers have embraced the government’s decision as a welcome step in strengthening the UK steel sector.
A spokesperson for Liberty Steel, one the UK’s major steelmakers, said its Dalzell plant in Motherwell, Scotland has been hit hard by imports from countries with lower environmental standards.
The move to cap these imports will help Dalzell and other plants in securing new business and increasing production levels back towards capacity,” the spokesperson added.
Trade body UK Steel, which represents all UK producers, has been calling for the strengthening of existing steel safeguard measures, especially crucial under the increased threat of redirected trade flows following US President Trump’s steel import tariff increases.
The body praised the swift actions taken by the UK government, which also include a lowering of the quota liberalization rate to 0.1% from 3.0% year on year, the tightening of country-specific limits and halting the rollover of unused quarterly quotas to the following quarter.
But the trade body called for further action to support the industry.
We now need to back the tightened safeguards up with the comprehensive new trade defense mechanism replacing the current system when it ends next year, UK Steel’s Stace said.