rexit now finds itself in a precarious final stage, with many UK industries worried about what will happen if a ‘no deal’ scenario plays out, including the UK steel industry.
Already the steel industry in the UK has struggled to compete against countries with lower wages and hence lower costs. Back in 1971, the Port Talbot Steelworks provided employment to over 320,000. At one point losing more than £1 million daily, it now employs just 32k people. The steel industry is now only responsible for 0.1% of the country’s economic output but is still held to be a cornerstone of manufacturing in the UK.
And some things have improved: the industry is doing well from the weaker sterling due to the Brexit vote and with Tata merging with ThyssenKrupp and hitting annual sales of around €14bn, the industry is back to being a notable global player once again.
But what about the future post Brexit?
After WW2, much of the UK steel industry became nationalised, being privatised again in 1988 and becoming the British Steel Corporation. In 2016, there seemed a chance of the industry being once again re-nationalised, although this now seems to have died a death. However, could the government provide financial support post Brexit? This cannot happen if the UK abides by EU law.
UK Steel tells us that the industry benefits more than any other from EU safeguards. After Trump introduced tariffs, the EU put their own in place. But if a ‘no deal’ Brexit situation results, then the responsibility for these tariffs would be down to the UK, with customs and border authorities not ready to take on the task. This would put the UK steel industry in jeopardy.
UK Steel and the steelworkers’ union are also worried that foreign exporters would take advantage of any ‘no deal’ scenario, leaving the UK with possibly the “weakest trade defence systems in the world and … newly exposed to steel dumping from countries like China.”
UK Steel is also concerned that the UK government will be seen as weak negotiators as they search for new trade partners once out of the EU. They are attempting to put in place a Trade Remedies Authority that would take care of all of this, but few expect it to be ready in time. A spokesman stated: “it is too early to say if the UK will continue to apply current countermeasures once we leave the EU.”
This does not help the UK steel industry who are waiting for answers. No one knows what will happen post Brexit Day on 29 March but whichever way it goes, a ‘no deal’ Brexit is going to impact greatly upon not only the UK steel industry but the global one too.