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Boris steels the show

by Sam Ashworth-Hayes | 04.04.2016

Since declaring with “deafening éclat” precisely which side of the Brexit divide he fell upon, Boris Johnson has been cheerfully riding roughshod over facts, and firing off statements and statistics with all the care for accuracy we’d expect of a North Korean missile launch.

His latest foray on Tata Steel is no improvement. Britain, he argues, is “powerless” to help the Port Talbot workers because we have “supinely given up” power to the EU. On the outside, he argues, we’d be able to cut energy costs and slap gigantic tariffs on imports of Chinese steel.

But as much as Brexiteers might wish it to be, quitting the EU is not a panacea for all of modern Britain’s ills.

Tariffs

Boris is right to say that the EU has been considering slapping anti-dumping tariffs on Chinese steel for some time. He conveniently omits the fact that Brussels has in fact imposed some duties.

He says the UK was lobbying against such tariffs, but has since changed its mind. Alas, the bureaucratic machinery of the EU grinds so slowly that we cannot act in time to save Port Talbot. “Nothing will happen in the near future, if ever,” he glumly concludes. There is no hope of mimicking the American’s steps in applying “266% tariffs on dumped Chinese steel”.

We could take a cheap shot and ask why the EU and the British government – Boris’s party – didn’t act sooner on a clearly visible threat, but we won’t. Instead, let’s look at the facts.

The EU has recently imposed anti-dumping duties of between 9% and 16% on Chinese steel. Sajid Javid, the business secretary, supports a rise to 20% to 30% – still nowhere near the US level.

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The government doesn’t support a larger increase. Javid argues that could have a “hugely damaging” effect on UK steel users, while risking “potentially ruinous retaliation”. He should know: at the same time as hitting China with a 266% tariff, the Obama administration imposed a 49% duty on some UK steel made by… Tata.

So leaving the EU would probably not see us impose massive tariffs on Chinese steel. In fact, it could make us less likely to act at all. On our own, we would be easy pickings for a Chinese government that has already imposed 46% tariffs against some UK speciality steel. And what would we give up? Tariff-free access to the EU, a market accounting for over 50% of UK steel exports.

Energy prices

Port Talbot is buckling not just from Chinese competition but from high UK energy costs. Boris acknowledges that much of this bill is self-imposed. But, he says, “the objections of Brussels to anything that looks like state aids” stops us cutting power costs for heavy industry.

We could point out that these are also UK objections – the UK is firmly behind EU efforts to stop countries unfairly subsidising industries –  and that handouts to steelmakers after a Brexit could subject us to anti-subsidy tariffs from Brussels. But, more simply, Boris is flat wrong: the UK sought, and received, EU state aid approval last year to alleviate the cost to heavy industry of environmental protection measures.

Boris did not respond to requests for comment.

The wording of this article has been altered to make it clearer that it would be Brussels that might impose anti-subsidy tariffs on British steel.

Edited by Alan Wheatley