The government is today announcing a comprehensive set of measures to secure and enhance the long-term future of UK steelmaking, strengthen national security and position the UK as a world leader in clean, modern steel production.

Steel production has played a central role in the UK’s history and is essential to our economic success and national security. It underpins key growth driving sectors of the Industrial Strategy, including advanced manufacturing, clean energy, defence and digital technologies. The sector supports thousands of skilled jobs and remains integral to communities across the country. It is a bedrock of our economic resilience and national security.

Despite its strategic importance, the UK steel sector has faced twenty years of decline. High operating costs and global overcapacity have significantly affected the competitiveness and viability of the UK steel industry, and manufacturers have increasingly turned to imported steel at artificially low prices. This situation has contributed to reduced investment, diminished capabilities and severe impacts on steelmaking communities. Crude steel production has fallen by more than 50% over the last decade. Successive governments have intervened to support individual companies but have not addressed the underlying causes of decline across the sector nor fostered broader, long-term conditions for a sustainable domestic industry.

While the sector faces challenges, this government does not accept that decline is inevitable. That is why we have today published our new steel strategy, which sets out a comprehensive plan to reverse historic trends and build a strong and resilient industry, supported by up to £2.5 billion of government investment, in addition to £500m for Tata Steel.

A key part of the strategy is the introduction of a new trade measure to ensure the future of domestic steel production in the face of global overcapacity, given the sector’s central role in critical national infrastructure, defence, and economic resilience. From 1 July 2026, overall quota levels for steel imports will be significantly reduced by 60% compared with the safeguard, and steel coming into the UK above these levels will be subject to a 50% tariff. This measure will apply to imported steel products that can be made in the UK.

A stable, thriving steel sector will provide a secure supply of high-quality steel to downstream customers. The tariff will apply only once import quotas have been met, which will facilitate continued imports for industries that rely on them, including those in the automotive, construction and defence sectors.

Following engagement with downstream importers, we are exploring a transitional arrangement under which the new tariff would not apply to goods under contract agreed before 14 March and imported between 1 July and 30 September 2026. We are finalising the details to ensure it provides genuine support to firms facing unexpected costs, while still protecting the UK market from excessive imports. Our quotas will be administered on a quarterly basis, with rollover between quarters within the same accounting year. We will also review the measure after twelve months to ensure it remains effective.

Alongside the new trade measure being announced today, the government will also launch a process at the WTO under GATT Article 28 to negotiate and agree an increase in the UK’s maximum Most Favoured Nation (MFN) steel tariffs to 50%. This will create the space for applied MFN tariffs to be increased in the future, protecting domestic industry in the long run from the impacts of global overcapacity.

The government’s approach is the result of extensive engagement with the Steel Council, trade unions and businesses, including responses to the recent call for evidence on supply chain needs. It aligns with the government’s Industrial Strategy and Trade Strategy, supporting resilient supply chains and secure growth in critical sectors.

The UK is not alone in taking steps to improve the security and resilience of the steel sector. Our neighbours and allies face the same challenges from overcapacity, which is challenging global markets. The European Union announced its own measure on steel trade last year. We are acting on the basis of shared concerns. That is why we are focused on engaging constructively with the EU, with whom our supply chains are so connected.

This trade measure, alongside our wider strategy, will reinforce the UK steel sector’s resilience and help us meet our ambition for domestic production to meet 40–50% of the UK’s steel demand.

Achieving these goals will also require investment in the sector’s future. Building on the direct support the government has made so far, the National Wealth Fund (NWF) will be the main mechanism for providing further financing for investment in the steel sector. The NWF is actively seeking engagement with steel firms and is looking to crowd in significant private capital to support the sector.

The government has reformed the Clean Industry Bonus to create new incentives for manufacturers to invest in UK steel in domestic wind turbines and wind farms. In parallel, electric arc furnace capacity will be expanded, recognising that stabilisation of the sector will mean a transition to more highly productive, decarbonised steelmaking. As we see at Sheffield Forgemasters, electric arc furnaces have the technical capability we need to produce steel at the highest of standards, including for safety-critical sectors such as nuclear, aerospace and defence.

Blast furnace capacity will continue to be required in the immediate term, and the government will therefore pursue a managed transition to ensure security of supply.

The strategy also places renewed emphasis on recycling. Greater use of domestically available scrap steel is a major opportunity for growth, and the government, through the creation of a new working group, is engaging with industry, academia and other stakeholders to ensure this potential is fully realised. We are announcing a new innovation working group, chaired by an expert to increase collaboration between our research community and industry. It will develop a clear direction for steel R&D. Through the Steel Council, we will foster collaboration between industry, devolved governments and wider stakeholders to address the sector’s workforce requirements.

To improve the business environment, the government is addressing the longstanding challenge of high energy costs as set out in the Industrial Strategy. Under our Clean Energy Superpower Mission, we will increase our energy security and reduce electricity bills by investing in clean energy and strengthening our connections to the EU energy market. While we will focus on translating the cheaper wholesale costs of clean power into lower bills, we also recognise the need to act quickly to support sectors with high growth potential and significant exposure to high electricity prices.

The British Industry Supercharger policy has already delivered substantial savings for steelmaking firms, and further benefits will follow from forthcoming changes to the Network Charging Compensation Scheme, the British Industrial Competitiveness Scheme which could save eligible firms up to £40 per megawatt hour from April 2027 and continued support for the Energy Intensive Industries Compensation Scheme, announced in the Budget, which has delivered financial support for steel businesses since 2013, and will continue to deliver electricity costs support for steel companies. These measures help reduce electricity costs for steel companies to make them more competitive.

The government recognises that public investment alone cannot deliver the scale of renewal required. New private sector investment is essential to increasing capacity and capability and stabilising the sector. Britain welcomes new entrants to the market, supported by government finance where appropriate. We will continue to work closely with the devolved governments in Wales and Scotland to attract further investment.

The steel strategy sets out a vision of government, industry and communities working together to make the UK steel sector more attractive to investors, more financially stable and more internationally competitive. This vision is already being realised. UK Export Finance has today signed a major financing agreement with Nigeria for the refurbishment of two major ports. Under this arrangement, British Steel Limited will supply 120,000 tonnes of steel billets, a contract worth £70 million and the largest British steel order that UKEF has ever backed.

The steel strategy will support the country’s broader ambitions in infrastructure, defence and technology. Steel produced in the UK will be required for the delivery of 1.5 million new homes; for the approved third runway at Heathrow, which alone will require 400,000 tonnes of steel; and steel made in the UK will be key to delivering the AUKUS submarine programme, a trilateral security partnership between Australia, the UK and the United States. The strategy will also support new data centres and gigafactories, including the Agratas facility in Oxfordshire, where 23,000 tonnes of steel, fully sourced from the UK, have already been used in construction.

The government is taking action to secure the future of the UK steel industry, recognising its importance to the nation’s economic and national security. Britain’s industrial past was built on steel, and our future will be too.

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