Yorkshire manufacturer warns steel tariff loophole could undermine UK manufacturing
A Yorkshire-based steelwork manufacturer is urging the government to take a much closer look at the future of Britain’s steel industry, warning that an unresolved loophole in its new tariff regime could leave UK manufacturers increasingly disadvantaged as the sector heads into 2027.
Tadweld, a specialist steelwork manufacturer based in Tadcaster, is backing calls for a public inquiry into the UK steel industry, arguing that the investigation must examine not just the challenges facing primary steel producers, but also the unintended consequences of policies that could make manufacturing overseas more attractive than making products here in Britain.
The concern centres on a significant gap in the government’s steel trade measures, introduced in July 2026. While the new regime reduces tariff-free import quotas for specified steel products by 51% and increases out-of-quota tariffs to 50%, many fabricated and derivative steel products remain outside its scope.
This creates a potentially damaging imbalance. UK manufacturers importing steel to fabricate into finished products can face higher material costs, while overseas competitors can import certain finished fabricated products without facing the same tariff measures.
Chris Houston, managing director at Tadweld, said: “We are heading towards 2027 and still haven’t properly answered one of the biggest questions facing British manufacturing: why should it cost more to make something in Britain than to manufacture it overseas and import the finished product?
“The government has introduced tariffs to protect British steel production, but there is a fundamental flaw in the approach. If you’re making steelwork abroad, you can potentially bring the finished product into the UK without facing the same tariff pressures as a British manufacturer buying the raw steel and doing all the fabrication here.”
He adds: “We’re effectively creating a situation where it’s easier to import manufacturing than to support it here at home. That’s a serious problem, and it’s exactly why we need a public inquiry. We need someone to look at the whole picture, understand the consequences of these decisions and ask whether the policies are actually achieving what they were supposed to.”
The timing is particularly important, with another significant change to the UK’s steel supply chain approaching.
Tadweld says the government needs to assess how these different policies interact, particularly where imported finished products may be treated differently from the raw materials purchased by British manufacturers.
The government has previously acknowledged concerns about potential tariff circumvention through imports of semi-finished and fabricated steel products. It has committed to monitoring the situation and reviewing the steel trade measures after 12 months.
Tadweld argues that a public inquiry would provide a more comprehensive examination of the industry’s challenges, bringing together the experiences of steel producers, fabricators, manufacturers, distributors and customers.
The company has already highlighted the financial pressures facing domestic manufacturers, previously reporting increases of 24.51% in the cost of mild steel sections, 30.63% in aluminium sections and 5.94% in stainless steel sheets.
These were actual increases in prices paid by the business, rather than theoretical market forecasts, illustrating the pressures that manufacturers are having to absorb.
Chris Houston added: “We could reach the end of 2027 having spent millions trying to protect British steel production, only to discover that more of the actual manufacturing work has moved overseas because the economics simply don’t stack up for UK fabricators.
“That would be completely counterproductive. You cannot build a strong manufacturing economy by protecting the raw material while making it harder for the businesses that use it to survive.
“We want to see British steel used in British manufacturing, and we want to see British businesses winning the work. But that requires a level playing field. It requires joined-up thinking from the government and, most importantly, it requires an honest assessment of what is and isn’t working.
“That’s why we support a public inquiry. Not to apportion blame, but to get to the bottom of the problems, understand the consequences of current policy and make sure we move into the new year with a clear understanding of manufacturing capabilities.”
Tadweld believes the UK needs a steel strategy that supports every stage of the manufacturing process, from primary steel production through to fabrication and finished products.
As the industry moves into 2027, the company says there is an opportunity to address the problems before they become more deeply embedded in the UK economy.
Chris Houston concluded: “We should be looking at 2027 as an opportunity to strengthen British manufacturing, not another year of trying to manage the consequences of policies that aren’t working for everyone.
“Protecting steel production is important, but protecting the ability to manufacture in Britain is just as important. The two should go hand in hand. A public inquiry would be an important first step towards making sure they do.”