Committee publication · Correspondence · 9 June 2026
Letter from Tata Steel UK relating to UK-US steel trade arrangements and UK-EU steel quota negotiations, 22 May 2026
From: Business and Trade Committee
Inquiry: UK trade with the US
Summary
Tata Steel UK updates the Business and Trade Committee on two critical trade issues: UK-EU steel quota negotiations and US tariff arrangements. The company warns that inadequate EU quota allocations risk diverting cheaper imports into the UK market, undermining domestic competitiveness. It welcomes a US Section 232 tariff clarification preserving $100m+ annual US export access until January 2028, but emphasises these trade frameworks must be calibrated together to prevent the UK becoming a displaced-import destination.
Key findings
- UK Government has provisionally set the overall steel quota framework scale, but the EU's allocation share remains unresolved; European Commission's position based on historic import shares would materially reduce quota access for UK exporters
- EU accounts for 75–78% of UK steel exports and represents the largest export market; reducing EU quota allocation risks redistribution to lower-priced, market-distorting non-EU sources
- US Bureau of Industry and Security clarified on 28 April that TSUK's UK-origin steel using Dutch substrate can access the 25% tariff (not 50%) until 1 January 2028, preserving $100m+ annual US revenues
- The compressed negotiating timetable requires the new UK quota framework to be agreed and implemented by 1 July 2026 following expiry of current safeguard measures
- Global steel trade environment is tightening rapidly as major economies strengthen protections in response to overcapacity; US, EU, and UK frameworks must be calibrated together to prevent trade diversion into the UK market
Tone
ProceduralTopics
Key actors
Tata Steel UK (TSUK), Russell Codling, UK Government, Department for Business and Trade, European Commission, US Bureau of Industry and Security
Notable line
“… if the final EU allocation is materially reduced, the remaining balance of the UK quota framework would likely be redistributed across non-EU countries.”
Key Quotes
“The EU represents a long-standing trading partner and remains by far the UK steel sector's largest export market, accounting for around 75– 78% of UK steel exports in recent years.”
“… if the final EU allocation is materially reduced, the remaining balance of the UK quota framework would likely be redistributed across non-EU countries. In our view, this would risk increasing volumes from markets associated with significantly lower-priced imports and greater market distortion”
“The European Commission's starting position appears to be based broadly on applying historic UK import share to newly reduced quota volumes, which would result in materially lower quota access for UK exporters compared to historic trading patterns.”
“The interaction between US tariffs, EU quota changes and the UK's own future quota framework means these issues cannot be viewed in isolation.”
“The clarification allows UK-origin steel produced by TSUK using substrate melted and poured in the Netherlands to continue accessing the lower UK tariff arrangement of 25% until 1 January”
“Commercially, the clarification enables TSUK to maintain existing sales into the US market, representing annual revenues in excess of $100 million and supporting high-value manufacturing exports from the UK.”
Source · parliament.uk record ↗