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This publication is available at https://www.gov.uk/government/publications/trade-remedies-notices-tariff-rate-quotas-on-steel-goods/trade-remedies-notice-202201-safeguard-measure-tariff-rate-quota-on-steel-goods

30 June 2022 with effect from 1 July 2022

This public notice is published by the Secretary of State under regulation 15(1)(b) of the Trade Remedies (Review and Reconsideration of Transitioned Trade Remedies) Regulations 2022 (S.I. 2022/113) (“the Regulations”) and gives effect to a decision of the Secretary of State under regulation 12 of the Regulations.

The application of the steel safeguard measure will be temporarily suspended for 2 years (from 1 July 2022 until 30 June 2024) with respect to goods originating in Ukraine.

The Trade Remedies Authority (TRA) accepted eight applications for reconsideration, the grounds of which set the scope for ongoing analysis. In addition to these, the TRA received 22 non-application submissions and two further responses from Interested Parties which were all taken into consideration. The TRA initiated its reconsideration on 7 September 2021.

On 22 March 2022, the Secretary of State informed the TRA that under Regulation 3(b) of the Call-in Regulations, she intended to take a decision as to whether to vary, maintain or revoke the tariff rate quotas applicable to goods that were the subject of the reconsideration.

In the transition review the TRA considered 1 January 2013 to 31 December 2017 as the period of investigation (POI), 1 January 2018 to 30 June 2020 as the most recent period (MRP), and 1 January 2017 to 31 December 2019 as the last three representative years for assessing traditional trade flows. The TRA gathered information about these periods during the transition review to inform assessments.

The TRA found that the aggregated UK import data for group 1 (flat products) and group 3 (pipes/tubes) showed a sudden, recent, sharp, and significant absolute and relative increase.

The TRA found that the aggregated UK import data for group 2 (long products) did not show a sudden, recent, sharp, and significant absolute increase or relative increase.

The TRA found that the evidence for the global steel market suggested it was highly likely there would be an oversupply in the international market for steel products under review for the foreseeable future.

An industry level analysis considering capacity, import trends, actions of other authorities, and attractiveness of UK market indicated a significant likelihood that imports would increase across all categories if the measure were revoked.

A group level analysis considering import trends found it likely that imports would significantly increase for all groups if safeguard measures were revoked.

The TRA assessed several indicators to identify impairment to the position of UK industry, however caused, and reported where it believed that, based on findings against one or more indicators, there was evidence that provided an indication of, or would be consistent with serious injury.

At an industry level, each assessment found an indication of serious injury except for the indicator ‘productivity’ and ‘market share’ where no indication of serious injury was found.

At an industry level other potential factors were assessed to establish whether they could also be a cause of serious injury. The TRA considered COVID-19, the UK’s departure from the EU, and cost of production and found it was not clear that any of these caused the serious injury previously experienced, nor was there any reason to believe that any of these factors (or all combined) were significant enough to foreseeably break a link between import pressure and serious injury.

At an aggregated group level, assessments were undertaken to identify any indications of serious injury. For group 1 an indication of serious injury was found in all assessments except productivity and price effects where no indication of serious injury was found. For group 2 an indication of serious injury was found in all assessments except increase in imports, market share, sales volume, and capacity utilisation where no indication of serious injury was found. For group 3 an indication of serious injury was found in all assessments except sales volume, production volume, productivity, and capacity utilisation where no indication of serious injury was found.

As a result of the above assessments at industry and group level the TRA found that there were indications of serious injury to UK producers for all three steel product category groups.

The TRA found evidence of positive impacts of extending the measure, as compared to revoking it. These included benefits to the UK steel industry from removing the likelihood of serious injury, in light of global overcapacity and the risk of trade diversion due to continuation of the measure in other major markets. Extending the measure would also likely benefit the upstream suppliers of scrap metal that relied on demand from the steel industry and would allow UK producers to remain viable suppliers to the UK market and competitive in the long term.

The TRA recognised that there were some potentially significant negative impacts of extending the measure. For example, importers would be less able to compete with UK producers above quota amounts and costs to downstream industries could increase. In the short-term, extension of the safeguard measure could hinder the ability of overseas suppliers to compete as effectively as in the absence of the measure and could result in a lower number of suppliers in the UK market.

The TRA concluded that the negative impacts did not outweigh the significant impacts and therefore found that the EIT was met for a safeguard measure to be applied to product categories 1, 2, 4, 5, 6, 7, 12A, 12B, 13, 16, 17, 19, 20, 21, 25A, 25B, and 26.

The Secretary of State has taken into account the TRA’s findings in sections 2.1 to 2.4 of the TRA’s Report of Findings and concluded that the maintenance of TRQs is necessary to remedy serious injury. The Secretary of State also recognised that adjustments are required to certain TRQ’s to better reflect trade flows.

In its Report of Findings, the TRA identified indications of serious injury. The Secretary of State has taken into account the Report of Findings and concluded that removal of the steel safeguard measure would likely result in an increase in imports and therefore would result in serious injury or the threat of serious injury to UK steel producers.

There is evidence in the TRA’s Report of Findings that removal of the measure would likely result in an increase in imports of steel products due to:

When investigated at an aggregate level (both at the industry level and at the group level) the Secretary of State concluded that UK steel producers were suffering threat of serious injury or threat of serious injury and that this would be likely to increase should the safeguard measure be removed. The Secretary of State has taken into account the assessments made throughout section 2.3 of the TRA Report of Findings that, at industry and group level, there were indications of serious injury to UK producers for all three steel product category groups.

The steel safeguard measure will continue to apply on the following 10 steel categories until 30 June 2024:

In reaching this decision, the Secretary of State for International Trade had regard to the public interest and the advice provided by the TRA on the economic interest.

** The number in square brackets indicates the corresponding category of steel products in Taxation Notice 2020/06: Safeguard measures on certain steel products – application of tariff rate quotas, which had effect from 11 pm on 31 December 2020 to 30 June 2022.

The additional amount of duty (“safeguard duty”) applicable to steel goods imported outside of the quota is 25% ad valorem.

The safeguard duty is applicable to the net free-at-the-frontier price of the good (before any other amount of import duty).

The tariff-rate quota set out in this notice has effect from 1 July 2022 to 30 June 2024.

The quota is divided into 8 Quarters over 2 years and specifies for each goods category the amount of steel goods that may be imported free of safeguard duty in any given Quarter.

The right to access the quota is granted by Her Majesty’s Revenue and Customs to importers in the United Kingdom on a first-come, first-served basis.

Importers are asked to cite the relevant order number set out in the Annex when applying to Her Majesty’s Revenue and Customs to access a particular quota.

Any unused quota allocated for steel goods originating in a country or territory remains available in the next Quarter for steels goods originating in that country or territory. Any unused balance may cumulate within the same year but any quota remaining at the end of each year is not available in the next year.

Importers of steel goods originating in a country or territory with an exhausted quota allocation for the year may, only in Quarter 4 of that year, apply for the right to use any remaining quota allocated for steel goods originating in all other countries or territories.

1 July 2022 to 30 June 2023, in tonnes (t), allocated quarterly:

The application of the steel safeguard measure will be suspended from 1 July 2022 until 30 June 2023 with respect to goods originating in Ukraine

1 July 2023 to 30 June 2024, in tonnes (t), allocated quarterly:

The application of the steel safeguard measure will be suspended from 1 July 2023 until 30 June 2024 with respect to goods originating in Ukraine.

Exclusion for steel goods originating in signatory countries or territories

All steel goods originating in a signatory country or territory specified below are excluded from:

a. the quota amount allocated for all other countries or territories; and b. the application of the safeguard duty.

Limited exclusion for steel goods originating in developing countries or territories

Except for steel goods in a goods category originating in a developing country or territory annotated with that goods category, any steel goods originating in a developing country or territory specified below are excluded from:

c. the quota amount allocated for all other countries or territories; and d. the application of the safeguard duty.

Key: * denotes a quota amount for the goods category is allocated for the country or territory; ^ denotes the quota amount for the goods category allocated to all other countries or territories is available for the country or territory.

Order numbers for importers to access the tariff-rate quota on steel goods

Don’t include personal or financial information like your National Insurance number or credit card details.

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