Boris Johnson has today suggested he is preparing to bring in a series of new steel tariffs in a bid to protect British manufacturing.
Johnson is also expected to announce a two-year extension to tariffs on Chinese steel exports, which would be a violation of World Trade Organisation (WTO) rules.
Boris Johnson today said “the UK steel industry has been going through a difficult time” and that “it is reasonable for UK steel to have the same protections that other European” manufacturers have.
The Sunday Telegraph reports that the Trade Remedies Authority (TRA), a UK trade watchdog, has advised the government that India, Tunisia, Vietnam and Turkey have all exceeded their respective imports quotas for developing countries and should have “safeguard” tariffs applied against them.
The TRA also recommended keeping measures against some developing countries that are already in place.
A TRA document sets out the government’s approach, saying: “The secretary of state [for trade Anne-Marie Trevelyan] has taken into account the TRA’s findings and concluded that the maintenance of TRQs [tariff rate quotas] is necessary to remedy serious injury.
“The secretary of state also recognised that adjustments were required to certain TRQs to better reflect trade flows.”
However, the TRA’s most recent ruling is that the UK should drop its tariffs against Chinese steel exports.
If Johnson goes ahead with the plan to extend tariffs on China it will lead to accusations he is breaching WTO terms, however the PM will likely claim that the UK has a right to protect its own national interest.
The Prime Minister will have to make a decision early next month when the current set of tariffs on China expire.
Johnson’s former ethics adviser Lord Christopher Geidt quit this month after he advised Johnson he would be breaking international law by maintaining tariffs on Chinese steel against the recommendation of the TRA.
Geidt said the Prime Minister had put him in an “odious position” of being asked to “license” a breach of international law.
Speaking today, Johnson said: “I think it’s very important people understand the context of this, and that is that the UK steel industry has been going through a difficult time, partly because of the energy prices that I have been talking about.
“We have a system in the UK where we don’t privilege our industry in the way that some other countries do. They pay a very high price for energy, we need to fix that.
“We need British Steel to be provided with much cheaper energy and cheap electricity for its blast furnaces but until we can fix that, I think it is reasonable for UK steel to have the same protections that other European, absolutely every other European steel economy does.”
It comes after international trade secretary Trevelyan said at a major WTO conference last week that “we will always adhere to the concepts on which the World Trade Organisation was founded – trade that is open and free and brings prosperity to the world”.