The UK government has announced sweeping changes to steel import controls taking effect on 1 July 2026. The new trade measure cuts import quotas by 60% compared to current safeguard levels and doubles the out-of-quota tariff rate from 25% to 50%.
For UK importers, steel processors, and downstream manufacturers, this represents the most significant shift in steel trade policy in over a decade. The changes affect 20 product categories spanning hot-rolled coil, cold-rolled sheet, coated products, sections, and wire rod — essentially all steel products that can be produced domestically.
This article breaks down what changes, which products are affected, how country-specific quotas work under the new regime, and what steps importers must take before the 1 July deadline.
What Changes on 1 July 2026
From 1 July 2026, the UK replaces the existing steel safeguard measure with a new trade measure designed to protect domestic steel production capacity. The announcement, made on 19 March 2026, follows a decade in which UK crude steel production has declined by more than 50%.
The two headline changes are:
Quota reduction: Import quotas are cut by 60% compared to current safeguard levels. This applies across all 20 covered product categories. The quota volumes are set on a quarterly basis, with unused quota expiring at the end of each quarter — no carry-forward is permitted.
Tariff increase: The out-of-quota tariff rate doubles from 25% to 50%. Any imports exceeding the quarterly quota for a given product category face a 50% ad valorem duty on the CIF value. For a £1 million shipment of hot-rolled coil, this means an additional £250,000 in duty costs if the quota is exhausted.
The government’s stated objective is to stabilise the UK steel industry in the face of global overcapacity. According to the policy announcement, global steel overcapacity is projected to reach 721 million metric tonnes by 2027 — approximately 13% more than the total production capacity of all OECD countries combined.
Which Products Are Affected
The new measure covers 20 steel product categories, each identified by specific commodity codes. The scope is broader than the previous safeguard, extending to some products not previously covered.
The affected categories include:
- Category 1: Hot-rolled coils and sheets (commodity codes 7208.10.00, 7208.25.00, 7208.26.00, 7208.27.00)
- Category 2: Cold-rolled sheets (7209.15.00, 7209.16.00, 7209.17.00, 7209.18.00)
- Category 3: Electrical sheets (7225.11.00, 7226.11.00)
- Category 4: Hot-rolled narrow strips (7211.14.00, 7211.19.00)
- Category 5: Cold-rolled narrow strips (7211.23.00, 7211.29.00)
- Category 6: Metallic coated sheets (7210.30.00, 7210.41.00, 7210.49.00, 7210.70.00)
- Category 7: Organic coated sheets (7210.70.00)
- Category 8: Tinplate products (7210.11.00, 7210.12.00, 7212.10.00)
- Category 9: Quarto plates (7208.51.00, 7208.52.00, 7208.53.00)
- Category 10: Heavy sections (7216.31.00, 7216.32.00, 7216.33.00)
- Category 11: Light sections (7216.10.00, 7216.21.00, 7216.22.00)
- Category 12: Merchant bars (7215.50.00, 7215.90.00)
- Category 13: Reinforcing bars (7213.10.00, 7214.20.00)
- Category 14: Wire rod (7213.20.00, 7213.91.00, 7213.99.00)
- Category 15: Stainless hot-rolled (7219.11.00, 7219.12.00, 7219.13.00, 7219.14.00)
- Category 16: Stainless cold-rolled (7219.31.00, 7219.32.00, 7219.33.00, 7219.34.00, 7219.35.00)
- Category 17: Stainless bars (7222.11.00, 7222.19.00)
- Category 18: Stainless wire (7223.00.10)
- Category 19: Seamless tubes (7304.11.00, 7304.19.00, 7304.22.00, 7304.23.00, 7304.24.00)
- Category 20: Welded tubes (7306.30.00, 7306.50.00, 7306.61.00)
Importers must verify the commodity code of every steel shipment against this list. HMRC’s Trade Tariff tool remains the authoritative source for commodity code classification. Misclassification risks not only duty penalties but potential seizure of goods at the border.
Country-Specific Quotas
The new measure allocates quotas on a country-specific basis for major steel-exporting nations. This replaces the previous “first-come, first-served” global quota approach for certain categories.
Country-specific quotas apply to imports from:
- European Union (aggregated as a single quota holder)
- India
- South Korea
- Vietnam
- Turkey
- United States
- Switzerland
- United Arab Emirates
- Japan
Each country receives a fixed allocation per product category per quarter. Once a country’s quota is exhausted for a given category, further imports from that country face the 50% out-of-quota tariff — even if other countries’ quotas remain unexhausted.
For example, if India’s Q3 2026 quota for hot-rolled coil is fully utilised by August, any Indian hot-rolled coil imported in September faces 50% duty, while EU-origin hot-rolled coil may still enter at zero duty if the EU quota remains available.
This system rewards importers who diversify their supplier base and monitor quota utilisation rates closely. HMRC publishes weekly quota exhaustion notices on GOV.UK — importers should subscribe to these updates.
Authorised Use Measure for Category 1
Category 1 (hot-rolled coils and sheets) includes a special “authorised use” quota with additional restrictions. This measure is designed to ensure that imported hot-rolled steel is used for downstream processing in the UK rather than re-exported in semi-finished form.
Under the authorised use provisions:
- Importers must declare the intended end-use at the point of import
- A country-specific cap limits any single country to 40% of the total Category 1 quota per quarter
- Goods imported under authorised use must be processed in the UK within 12 months
- Re-export of unprocessed authorised-use steel is prohibited
The 40% country cap prevents over-reliance on any single supplier. For importers currently sourcing 80-90% of hot-rolled coil from one country, this requires immediate supply chain diversification.
To claim authorised use quota, importers must:
- Obtain an order number from the Import Licensing Branch (ILB) before shipment
- Declare the order number on the customs entry (C88/SAD)
- Maintain records of downstream processing for 4 years
- Submit annual usage declarations to the ILB
Failure to comply with authorised use conditions can result in retrospective duty assessment at the 50% out-of-quota rate, plus interest and penalties.
Transitional Arrangements
The government has announced a transitional arrangement for goods under contract before 14 March 2026 (the date the policy intention was announced) and imported between 1 July and 30 September 2026.
To qualify for transitional protection:
- A binding contract must have been signed before 14 March 2026
- The contract must specify quantity, price, and delivery terms
- Import must occur between 1 July and 30 September 2026
- Importers must submit evidence of the contract date to HMRC
The transitional arrangement does not exempt goods from quota requirements — it provides access to a separate transitional quota pool. Once the transitional pool is exhausted, standard quota rules apply.
Importers with pre-14 March contracts should:
- Gather signed contracts with clear dates
- Calculate total volumes covered
- Contact the Import Licensing Branch to register interest in transitional quota
- Plan for potential shortfalls if transitional quota is oversubscribed
The transitional window closes on 30 September 2026. Any goods arriving after this date face the full new measure with no grandfathering.
Impact on UK Importers
The 60% quota cut and 50% tariff rate will affect different importers in different ways. The impact depends on current supplier mix, product categories, and ability to pass costs through to customers.
High-risk importers:
- Those sourcing more than 60% of steel from a single country (especially India, Turkey, or Vietnam for certain categories)
- Importers of commodity-grade hot-rolled coil with thin margins
- Traders who hold stock for resale rather than processing
- Businesses without in-house customs classification expertise
Lower-risk importers:
- Those with diversified supplier bases across multiple countries
- Importers of specialised grades not widely produced in the UK
- Businesses with long-term fixed-price contracts hedged against duty changes
- Companies with bonded warehouse facilities allowing quota-timed releases
For most importers, the priority actions are:
1. Audit current supplier mix. Map volumes by country and product category. Identify concentrations exceeding 40% for Category 1 or 60% for other categories.
2. Model cost impacts. Calculate the landed cost increase if current import volumes exceed the new quotas. At 50% duty, many imports become commercially unviable.
3. Engage suppliers. Discuss alternative sourcing, delivery timing to match quota quarters, and potential price adjustments. Some suppliers may absorb part of the duty cost to maintain market share.
4. Review Incoterms. If currently buying on EXW or FCA terms, consider whether switching to DDP (delivered duty paid) transfers quota management risk to the supplier — though this typically comes at a price premium. For a full explanation of Incoterms and their cost implications, see Incoterms Explained.
5. Check bonded warehouse options. For importers with flexible demand, storing goods in bond and releasing them at the start of new quota quarters can smooth quota utilisation.
How to Claim Quota
Accessing quota requires advance planning and coordination with the Import Licensing Branch (ILB), part of the Department for Business and Trade. (For more on import licensing, see Import Licence Requirements.)
Step 1: Determine your quota category
Identify the commodity code for your steel product and confirm which of the 20 categories it falls under. The ILB publishes a detailed mapping document on GOV.UK.
Step 2: Check quota availability
Before placing an order, check the ILB’s online quota portal for remaining quota volumes for your product category and country of origin. The portal updates weekly.
Step 3: Apply for an order number
Submit an application to the ILB with:
- Commodity code
- Country of origin
- Quantity (in tonnes)
- Supplier details
- Expected arrival date
Processing typically takes 5-10 working days. Rush processing is not available.
Step 4: Declare on customs entry
Enter the order number in box 44 of the C88/SAD customs declaration. The order number is valid for 90 days from issue — shipments arriving after expiry require a new order number.
Step 5: Monitor quota year-end
Quota years run 1 July to 30 June. Unused quota expires on 30 June — there is no carry-forward. Plan imports to utilise quota before year-end, but avoid last-minute rushes that risk missing the deadline.
Key Dates and Deadlines
1 July 2026: New trade measure takes effect. All imports from this date face the 60% quota cut and 50% out-of-quota tariff.
14 March 2026: Policy announcement date. Contracts signed before this date may qualify for transitional arrangements.
30 September 2026: Transitional arrangement window closes. No transitional protection for imports after this date.
30 June 2027: End of first quota year. Unused quota expires.
Weekly: HMRC publishes quota exhaustion notices on GOV.UK. Importers should check every Monday morning.
Quarterly: Quota resets on 1 July, 1 October, 1 January, and 1 April. Plan shipment timing to align with quota availability.
Strategic Considerations
Beyond immediate compliance, the new steel trade measure has longer-term strategic implications for UK importers and manufacturers.
Supply chain resilience: Over-reliance on any single country or supplier is now a commercial risk, not just a supply chain concern. Diversification is essential. Consider developing supplier relationships in countries with underutilised quota allocations.
Vertical integration: Some importers may explore upstream investment — acquiring stakes in foreign mills to secure quota access. This is capital-intensive but provides long-term supply security.
Product differentiation: Commodity-grade steel faces the stiffest competition and highest duty risk. Moving into specialised grades (automotive, aerospace, energy) where UK production is limited can reduce exposure.
Stock management: Just-in-time inventory models may need adjustment. Holding 8-12 weeks of stock provides buffer against quota exhaustion and shipment delays. Calculate the carrying cost against the risk of 50% duty spot purchases.
Customer contracts: Review long-term supply agreements. If contracts lack duty pass-through clauses, importers bear the full cost of quota overruns. Renegotiate to include duty variation mechanisms tied to HMRC tariff schedules.
Conclusion
The UK steel trade measure from 1 July 2026 fundamentally reshapes the economics of steel importing. A 60% quota cut combined with a 50% out-of-quota tariff will force importers to rethink sourcing strategies, supplier relationships, and inventory models.
The window for preparation is narrow. Importers must audit their current supply chains, secure order numbers from the Import Licensing Branch, and model cost impacts under various scenarios. Those who act decisively can secure quota access and maintain competitiveness. Those who delay risk being locked out of the market or facing prohibitive duty costs.
The measure is intended as a temporary protection for UK steel production capacity. Whether it succeeds in stabilising the domestic industry while maintaining adequate supply for downstream manufacturers remains to be seen. For importers, the priority is navigating the transition without disrupting operations or eroding margins.
Key Takeaways
- Quotas cut by 60%: Import quotas for 20 steel product categories are reduced by 60% compared to current safeguard levels, effective 1 July 2026.
- Tariff doubles to 50%: Out-of-quota imports face a 50% ad valorem duty, up from the current 25% rate.
- Country-specific allocations: Major suppliers (EU, India, South Korea, Vietnam, Turkey, USA, Switzerland, UAE, Japan) receive individual quotas per category per quarter.
- Category 1 authorised use: Hot-rolled coil imports require end-use declarations and are subject to a 40% country cap per quarter.
- Transitional protection available: Contracts signed before 14 March 2026 may qualify for transitional quota access for imports between 1 July and 30 September 2026.
- Order numbers required: Importers must obtain quota order numbers from the Import Licensing Branch before shipment and declare them on customs entries.
Frequently Asked Questions
What happens if I import steel without a quota order number?
Imports without a valid order number are not refused entry, but they are automatically charged the 50% out-of-quota tariff rate. You cannot reclaim this duty retrospectively even if quota was available. Always secure an order number before shipment.
Can I transfer my quota allocation to another importer?
No. Quota order numbers are issued to specific importers for specific shipments and are non-transferable. Attempting to transfer or trade quota allocations is a criminal offence under the Customs and Excise Management Act 1979.
How do I know if my supplier’s country quota is exhausted?
HMRC publishes weekly quota exhaustion notices on GOV.UK. The notices list each product category and country, showing remaining quota volumes. Subscribe to email alerts for automatic updates. Your freight forwarder should also monitor this.
Does the 50% tariff apply to the full shipment value or just the excess?
The 50% tariff applies to the entire CIF value of the shipment, not just the portion exceeding quota. If your quota allows 100 tonnes but you ship 150 tonnes, the full 150 tonnes faces 50% duty — not just the 50-tonne excess.
Can I carry forward unused quota to the next quarter?
No. Unused quota expires at the end of each quarter (30 September, 31 December, 31 March, 30 June). There is no carry-forward mechanism. Plan imports to utilise quota within the quarter it is allocated.
What if my goods are already en route when the measure takes effect on 1 July?
The measure applies based on the date of customs clearance, not the shipment date. Goods arriving on or after 1 July 2026 are subject to the new quotas and tariffs, regardless of when they left the port of loading. Consider expediting clearance for shipments due in late June.