EU halves duty-free steel quota but UK and other partners given better rate

The European Union (EU) has decided to accept less duty-free steel from countries outside the bloc. However, the EU has agreed to allow higher import volumes for many trading partners, including the UK. Some companies, like Tata Steel UK, Britain’s largest steel producer, will see their duty-free exports reduced by a significant 60%.

These new rules are intended to reduce the amount of cheap steel coming from China into the EU. Thirteen countries that have a free trade agreement (FTA) with the EU, the UK among them, will see their allowed duty-free steel quota reduced by only one-third. This is a better outcome than for countries without such agreements.

The EU trade commissioner, Maroš Šefčovič, explained that these measures are necessary to ensure the EU’s steel system works correctly from the start. He added that the commission is providing clear rules so that businesses know what to expect regarding quota distribution.

This decision creates a significant difference in trade between the UK and the EU since Brexit in 2020. The UK also announced similar measures last week to decrease foreign steel imports and support its own industries. The impact of these combined changes on Tata Steel UK's business is expected to be considerable.

The EU’s decision to limit steel imports is partly a response to the US imposing tariffs on steel imports in April 2025. This caused trade to be redirected towards the EU. An EU official mentioned that the EU was compelled to act due to an oversupply of steel in its market, rather than simply copying the US.

As the US protected its market, more steel began to flow into the EU. Officials acknowledged that these discussions with trading partners were challenging. The European steel association, Eurofer, believes these new limits could help the continent’s steel industry recover lost production.

The UK’s trade body, UK Steel, welcomed the agreement but hopes for further improvements. Negotiations between the UK and the EU on trade issues have been delayed until autumn following the resignation of Keir Starmer. UK Steel highlighted the interdependence between the two, with 70% of British steel being exported to the EU.

The EU had initially planned to cut overall tariff-free imports by 47% from non-EU countries starting July 2026. Tariffs for imports outside the new quotas would also double to 50%. However, deals were made with FTA countries, allowing them to export a higher percentage of their historical trade levels. These new rules mean that hopes for a joint UK-EU alliance to counter China in the steel market are now less likely.