UK and EU Set Rival Steel Import Quotas as Peter Kyle Meets EU Commissioner in Brussels

UK business secretary Peter Kyle is scheduled to meet EU trade commissioner Maroš Šefčovič in Brussels on Friday morning to discuss EU plans to reduce tariff-free steel imports from non-EU countries, including the UK, by 47 percent on 2024 levels beginning 1 July.

The new EU quota system takes effect the same day the UK must implement its own post-Brexit steel import regime. The UK was previously covered under the EU's safeguards but now sets separate quotas and tariffs.

European Steel Association Eurofer has written to Šefčovič protesting the UK's provisional quotas. Director general Axel Eggert said the UK is setting new quotas for the EU at extreme low levels, with the EU receiving 9 percent of prior hot coil imports, 4 percent of tin mill imports, and 3 percent of merchant bars imports.

Eggert added that UK quotas would cut EU exports of organic coated products by 80 percent, rebar steel by 45 percent, and steel rails by 38 percent.

He stated that a zero reduction in exports from the UK is not possible and that the UK will have a lower quota, though he said the UK should definitely get preferential treatment over rivals. The UK government is cutting steel import quotas by 60 percent while the EU is cutting them by 50 percent. Both sides say the measures aim to protect domestic producers from Chinese competition.

UK steel industry sources note that the British quota system is flexible and can be adjusted if the EU responds in kind, whereas the EU system is capped at a 50 percent reduction. They argue that lowering the UK's share of the EU quota would simply increase allocations to non-European countries.

Eggert said the UK and EU are so interconnected that the dramatic UK reductions may be a negotiating tactic ahead of a mutually beneficial settlement.

One EU diplomat said the quotas will bring economic costs for both sides and slightly higher costs for the UK. The meeting occurs as hopes for a joint UK-EU "steel club" to coordinate against Chinese exports have faded, with one EU diplomat noting the United States has shown no interest in supporting such an arrangement.