9 Acknowledged

We ask the Government to confirm if the European Commission’s commitment to ‘duly reflect’ historic...

Recommendation
We ask the Government to confirm if the European Commission’s commitment to ‘duly reflect’ historic UK export volumes of Category 17 steel in its new steel tariff regime means that historic UK volumes of such exports will still be able to enter the EU tariff-free from June. We also ask the Government to clarify if it sought a more durable arrangement with the EU on steel tariffs in the run-up to the May 2025 summit; provide an update on its engagement with the Commission more generally to avoid the imposition of tariffs on exports of British steel in other categories from summer 2026; 87 and set out to what extent the UK’s “red lines” for negotiations with the EU, particularly on customs matters and the Single Market, affect its ability to do so. (Recommendation, Paragraph 40)
Government Response Summary
The government states that it is committed to finding a bilateral solution with the EU on steel measures that protects vital UK-EU steel trade and both industries, following the EU's announcement of future steel trade measures in October 2025.
Government Response
Acknowledged
HM Government Acknowledged
Steel remains a vital sector for both the UK and EU, which is why the need to protect historic levels of trade was recognised by both parties at the UK-EU summit, particularly in regard to category 17 steel. Since the summit, both the UK and EU have announced measures to provide effective protection to their industries. The EU announced its future steel trade measures in October 2025, which will reduce tariff-free imports by 47% and increase the out of quota tariff by 50%. These measures are expected to come into effect on 1 July 2026, replacing the EU’s current safeguard measures. The EU is currently taking forward discussions with key trading partners under Article XXVIII GATT procedure regarding this change to the EU’s WTO tariffs, to offer third countries country specific allocations. EEA countries (Norway, Iceland, Lichtenstein) will not be subject to tariff quotas or duties, due to their integration into the single market. We continue to engage with the EU at all levels, including at the WTO about their future measures. Under the EU’s future steel trade measures, UK steel exports will continue to enter the EU tariff free, subject to and in line with the UK’s quota. Throughout discussions we have been clear with the EU that the UK’s sector is not a source of global overcapacity, or the challenges that the EU seeks to address through its measures. We also have appropriate channels to discuss our joint strategic challenges on global overcapacity, through multilateral fora such as the Global Forum on Steel Excess Capacity. The UK and EU have also established a high-level exchange to discuss issues of strategic interest and held this first meeting on 2 February. The UK has also announced that from 1 July 2026, overall quota levels for steel imports will be significantly reduced by 60% compared to current arrangements, and steel coming into the UK above these levels will be subject to a 50% tariff. This is a vital measure to protect steel production due to global overcapacity, and in turn our critical national infrastructure and defence. We are committed to finding a bilateral solution with the EU on our respective measures, which protects vital UK-EU steel trade and both our industries. Discussions ahead of the 2025 Summit on steel were focused on specific categories of steel, with an overall commitment to protect historic levels of trade. Our future and respective measures are about responding to global overcapacity and ensuring protections for our respective industries. I would emphasise that both the UK’s own Steel Strategy and the EU’s draft EU steel measure confirms the intention that Northern Ireland and the specific arrangements to support the movement of steel should be taken into account as we move forward. Our overall objective with the EU remains to find a durable, mutually agreeable solution as part of our respective negotiations.