Ditch steel tariffs or risk putting economy on the line, PM warned

‘The car industry could find its supply chains even more badly disrupted than they were due to the pandemic’

BORIS JOHNSON’S former candidate to lead the World Trade Organisation has described the Prime Minister’s decision to impose “protectionist” steel tariffs as “one of the worst decisions taken by this government”.

Writing in The Sunday Telegraph, Liam Fox said the UK should “show leadership on free trade” rather than “damaging our global reputation and putting other sections of our economy at risk”. He urged Mr Johnson to ditch the tariffs, “if this is not to be a Conservative government in name only”.

The intervention by Dr Fox, a former trade secretary, comes after AnneMarie Trevelyan, who now holds the trade brief, announced a two-year extension of tariffs on steel imports, despite admitting that the move “departs from our international legal obligations” under WTO rules.

A series of decisions taken by Ms Trevelyan last week will also result in tariffs being imposed on steel imports from developing countries such as South Korea, that are not currently subject to them. Mr Johnson is hoping that the move will help to shore up the Conservatives in Red Wall areas, where steel firms have complained they are being undercut by imports from abroad.

Ms Trevelyan told MPs that the UK steel industry, which employs 33,000 workers, would face “serious injury” if the tariffs were lifted.

But, last week, British manufacturers that rely on imported metals called on the Government to let them import more steel products without paying tariffs because domestic suppliers have failed to meet demand. They now face 25 per cent duties on a key raw material.

Dr Fox said: “Protectionism, like inflation, always hits the poor hardest. This will be no different as Britain breaches our WTO commitments with our steel measures and the consequences will be essentially the same as with the Trump administration. While artificial protections may diminish the pressure on a few UK steel producers, retaliatory measures by those countries whose exports are hit are likely to impact on other areas of the economy.

“The car industry, so vital for much of the north east of England, could find its supply chains even more badly disrupted than they have been because of the pandemic.”

The former defence secretary added: “We must find a solution for the steel industry that will not involve damaging our global reputation and putting other sections of our economy at risk. Choosing protectionism is one of the worst decisions taken by this government ... We need to find another answer to the problem if this is not to be a Conservative government in name only.”

A government spokesman said the decision was taken in order to “support a critical national industry” and followed “careful consideration of the balance between our national interest and international obligations”.

The spokesman said the measures have cross-party support and the backing of industry.