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IEA - Steel tariffs will hurt cost of living
Energy Analyst at the Institute of Economic Affairs Andy Mayer reacted to the news that the UK will hike a 50% tariff on steel
“Putting a 50% tariff on imported steel will not make British steel cheaper. But will make all steel, used by British industry, most of which will still need to be imported, immediately more expensive.
“It will protect some UK plants from competition and save a handful of steel jobs. But at the expense of jobs elsewhere, as trade partners retaliate, higher prices undermine wider competitiveness, kill British exports, and add to the cost-of-living crisis. We will all get poorer for years to come because Ministers don’t like bad headlines today.”
Daniel Freeman, Managing Editor at the Institute of Economic Affairs said:
“At a time when the public is worried about the rising cost of living, it is surprising that the government is embracing a policy specifically designed to raise the price of a key industrial input good. Tariffs on steel will lead to higher production costs in a huge range of industries that use steel, from car manufacturing to construction, which will in turn drive up the price of the goods they produce. This both increases the cost of living in Britain and makes UK exports less competitive abroad.
“If the government wants to help, it should focus on removing or reforming policies which constrain the supply of energy and give the UK some of the highest industrial prices in the world. These have been devastating to the viability of energy-intensive industries, including but not limited to steel, while acting as a general drag on economic growth. It should not be granting special treatment to favoured industries and handing the bill to the public.”
