UK to Cut Steel Import Quotas, Raise Tariffs to Protect Domestic Industry

• Government launches new strategy on steel
• Steel import quotas slashed, tariffs to rise to 50%
• British steel production has faced decades of decline

LONDON, March 19 (Reuters) - Britain will lower its tariff-free quota on imported steel and double the tariff on imports exceeding that quota, the government said on Thursday, launching a plan to protect its small but strategically and politically sensitive steel sector.

Steelmakers have struggled to survive in the birthplace of the Industrial Revolution after decades of decline driven by long-term de-industrialisation and, more recently, by high energy costs and a global glut of cheap steel.

The government will cut the amount of steel that can be imported without incurring tariffs by 60%. Imports above that new level will face a 50% tariff - twice the previous rate of 25%. The changes will come into force on July 1.

The move brings Britain's tariff rates into line with recent increases in the United States and proposals by the European Union, against a backdrop of heightened global trade tensions as U.S. President Donald Trump uses trade measures to further his "America First" agenda.

The British government also said that its National Wealth Fund would make up to 2.5 billion pounds ($3.33 billion) available to help finance investment in the sector and that it wanted 50% of steel used in Britain to be produced domestically, up from the current target of 30%.

"Making steel in the UK is vital for national security, critical infrastructure and the wider economy," Business Secretary Peter Kyle said in a statement.

"With this strategy we are closing the decades-long chapter of destructive de-industrialisation and committing instead to strengthening and sustaining Britain as a steel-making nation."

Unions and industry bodies welcomed the measures.

The sector only accounted for 0.1% of UK economic output in 2024 but supported 37,000 jobs, many in heartlands of the governing Labour Party which grew from a trade union movement deeply rooted in Britain's industrial heritage.

Two of the country's biggest steelmakers have faced financial troubles in recent years.

Tata Steel has closed its blast furnaces at Port Talbot, while the government had to seize control of British Steel to prevent the shutdown of its Scunthorpe plant under Chinese owner Jingye, taking on huge costs in the process.

($1 = 0.7502 pounds)