The Building Cost Information Service (BCIS) is the leading provider of cost and carbon data to the UK built environment. Over 4,000 subscribing consultants, clients and contractors use BCIS products to control costs, manage budgets, mitigate risk and improve project performance.
Published: 24/06/2026
Industry pressure is mounting on ministers to revisit the UK’s new steel tariff and quota regime days before its planned introduction on 1 July.
However, a recent response from the Minister for Industry, Chris McDonald, suggests the government is unlikely to confirm the final arrangements until discussions with the EU on steel trade have concluded.
Amanda Brooks, the Interim Permanent Secretary for the Department for Business and Trade (DBT), similarly suggested that the new measures are yet to be finalised at a Public Accounts Committee (PAC) meeting on Monday(1).
Brooks confirmed that ‘limited changes’ were expected to the provisional trade measures in response to industry feedback, and that the government’s intention is to clarify the new arrangements by 1 July.
The situation is complex. With these new measures, the government is aiming to reinforce domestic production while trying to limit additional supply and cost pressures on downstream users at the same time.
Whether that balance can be struck is what the latest evidence to the Public Accounts Committee puts into question. BCIS experts assess the likely implications for steel users and the wider supply chain.
What we learned from the PAC meeting
Brooks’s evidence to the PAC provided greater clarity on how the new trade measures are expected to operate. Amid speculation about their potential impact, she confirmed that the tariff and quota arrangements would apply only to certain steel imports, rather than all steel products, in line with supporting government documents.
The government also appears willing to make limited adjustments to the provisional measures in response to industry feedback, though the discussion suggested these are more likely to be refinements than significant changes to the overall approach.
A 12-month review is planned to assess whether the measures are achieving their intended objectives. Brooks also noted that unused quotas will roll over into the following quarter, which could help mitigate some cost pressures for businesses.
Despite these reassurances, the PAC heard evidence that some firms could still face challenges. Brooks acknowledged the complexity of the steel market and the difficulty of balancing support for domestic producers with the needs of downstream users.
She pointed to steel pipes as an example. Pipes are produced in a range of diameters and lengths, with some available from UK manufacturers and others not. However, these products sit within the same eight-digit commodity code, which is the level at which HMRC applies and enforces the tariff measures – making it impossible to distinguish between UK-produced and non-UK-produced products within that classification.
This means a business may need to import a particular type of pipe because no UK-made alternative exists. Yet that product could still be subject to the same tariff arrangements as pipes manufactured domestically, simply because they share the same tariff classification.
As a result, businesses could face higher costs where no domestic alternative is available, if tariff costs are passed on.
Committee members raised concerns that the combined effect of tariffs, bulk purchasing requirements and the limitations and cost of storage capacity, could make it commercially non-viable for some businesses to source the steel they need.
Brooks acknowledged this risk while reiterating that the government’s objective is to balance the interests of UK steelmakers and downstream users.
How might the new steel trade arrangements affect supply and costs?
For steel producers, the immediate question is whether the new arrangements will result in increased demand and whether domestic capacity can respond, according to BCIS chief economist Dr David Crosthwaite.
For downstream users and the wider construction sector, the more important issue is likely to be the effect on supply availability, materials costs and tender prices.
‘New commentary from BCIS panels suggests that experiences of, and expectations for, steel cost movements remain mixed,’ Dr Crosthwaite said.
‘There have been reports of cost increases since the start of the conflict in the Middle East, alongside expectations that costs could rise further as a result of tariff changes and the introduction of UK and EU Carbon Border Adjustment Mechanisms.
‘However, other anecdotal evidence suggests that the new tariff and quota changes have yet to emerge as a significant issue in tender submissions or discussions between contractors and clients, indicating that any market response remains uneven.’
As members of the BCIS Civil Engineering Tender Price Index Panel noted, steel costs are being influenced by several factors at once, making it difficult to assess the likely impact of the trade measures in isolation before they come into force.
BCIS senior estimator Julian Attwood said the current inflation environment provides important context.
‘The UK enters this period with construction materials inflation relatively contained by recent standards. The DBT Index of Construction Materials Prices for all work, produced by BCIS for the government, increased by 3.2% in the 12 months to April 2026. Over the same period, prices for concrete reinforcing steel bars fell by 5.2%,’ he said.
‘While there are some outliers, including prices for fabricated structural steel, which rose by 8.5% in the 12 months to April 2026, this suggests that steel has not been a major contributor to construction materials inflation ahead of the new trade measures.’
Further, the recent easing in tensions between the US and Iran and weak construction demand may help limit upward pressure on steel product costs to contractors. However, these conditions may not be enough to offset upward pressure from shortages if the new trade measures lead to squeezed domestic capacity.
The Construction Leadership Council (CLC) raised similar concerns in its submission to government, noting that supply constraints could emerge where domestic mills are already operating at capacity or do not manufacture the steel grades and section sizes required by the market(2).
Attwood said any impact is likely to vary by product.
‘The greatest inflationary risk appears concentrated in products that rely heavily on imported supply, particularly structural steel sections, reinforcing steel and some plate products. Other steel products may see little change if domestic supply remains sufficient or quota arrangements prove less restrictive.’
Beyond pricing, there may also be implications for the fabricated structural steel sector. Concerns have been raised that steel fabricated overseas and imported as a finished product may not be subject to the same tariff arrangements. The CLC estimates this could put around 30,000 jobs at risk in the domestic fabrication sector, approximately half of the current workforce.
What does this mean for construction?
For contractors and clients, the implications of the new trade arrangements may extend beyond materials costs.
Make UK has advised steel-importing businesses and steel‑intensive supply chains to consider including contractual provisions that address potential changes in materials prices arising from tariffs, and to consider reviewing quotation validity periods accordingly(3).
Contractors may therefore wish to revisit bidding assumptions and contract terms and place greater emphasis on fluctuation provisions and the allocation of procurement risk.
For those involved in cost planning, close monitoring of steel pricing, availability and lead times will remain important as the new arrangements bed in, while early communication between clients, contractors and suppliers will help ensure that emerging risks are identified early, and managed before they affect programme or cost.
To keep up to date with the latest industry news and insights from BCIS, register for our newsletter here.
