Northern Ireland Protocol: Anger as EU imposes 25% tax on steel coming into NI in from GB

The UK Government says the hike is “another example of how the Northern Ireland Protocol is needlessly damaging trade within the UK and demonstrates why it needs to be urgently fixed”.

However the Alliance Party insists the tariff is not “solely” due to the Protocol and called for negotiation with the EU and not confrontation.

DUP MP Carla Lockhart has written to the Chancellor to request that he suspend the EU’s 25% new tariff on steel coming into NI.

She said the tariff is being introduced as a result of the Northern Ireland Protocol, after EU quotas for global imports were exhausted.

“The impact of this tariff will be felt right across our construction sector,” she said. “Any family building a new home will be hit in the pocket. New house prices will rise. The cost of building new schools, new hospitals, new road infrastructure will rocket. Constructions costs are already at record highs. Due to the Protocol, they are about to go even higher.

“This tariff will also place our local manufacturing sector at a competitive disadvantage.”

Quotas on steel exports are part of the UK and EU’s Trade and Co-operation Agreement.

Under the protocol, GB traders must effectively treat Northern Ireland as part of the EU single market for goods.

Recent changes to EU rules on certain types of steel mean a quota that allowed for tariff-free movement of the materials from GB to NI has been exhausted quicker than initially anticipated. The rule changes only relate to certain categories of steel, with the movement of other types remaining tariff free.

The DUP said the latest development linked to the Protocol highlighted the need to trigger the Article 16 mechanism to suspend the relevant elements of the trading arrangements.

The Government is already putting legislation through Parliament that would empower ministers to unilaterally scrap the bulk of the protocol. It is a move that the EU claims would breach international law.

Article 16 is an agreed mechanism within the protocol that allows the UK or EU to suspend parts of the arrangements if they consider them to be causing economic, societal or environmental harm.

Triggering Article 16 would prompt a fresh round of negotiations between the EU and UK to resolve the issues.

The DUP claims the Government could disapply the steel tariff immediately if it triggered Article 16, ahead of the passage of the domestic legislation that would enable London to scrap the arrangements entirely.

DUP Economy Minister Gordon Lyons said the criteria for triggering Article 16 had clearly been met.

“What we’re facing right now is quite clearly what I believe would fall under within Article 16 and the economic difficulties that the protocol is causing,” he told Radio Ulster.

“It would give the UK Government the authority to disapply that and to make sure that the quota wasn’t applied in that circumstance.

“But we’ve already met the criteria for the triggering of Article 16 a long time ago, there’s quite clearly been a diversion of trade.”

He added: “I think that it would give the UK Government the ability to disapply that tariff.

“They would be able to take unilateral action to deal with difficulties the protocol is causing. There is no issue right now with a tariff on steel between England and Scotland or England and Wales. It’s between Britain and Northern Ireland.” He added that the Alliance Party is “still recklessly calling for the full implementation of the NI Protocol” which he said would mean luggage checked when travelling from GB to NI; more stringent port checks, “chaos” for pet medicine and “less” on supermarket shelves at higher prices.

A UK Government spokeswoman said: “This is another example of how the Northern Ireland Protocol is needlessly damaging trade within the UK, harming businesses in Northern Ireland, and demonstrates why it needs to be urgently fixed.”

“We are in constant contact with industry representatives on practical solutions to this issue but a long term solution requires changes to the Protocol.”

However, Alliance MP Stephen Farry urged the UK and EU to engage in negotiation to resolve the issue.

“The imposition of the 25% tariff is clearly a problem for local manufacturers who depend on steel imports from Great Britain,” he said.

“It brings more costs and uncertainty on top of the pain from the energy crisis.

“However, it is also an issue for Irish companies who source their steel via a UK supply chain, which negates a simplistic analysis this is solely a consequence of the protocol. This is yet another consequence of Brexit.

“The problem lies in the intersection between the protocol and a weak UK-EU Trade and Co-operation Agreement, in which the UK Government did not adequately foresee this and ensure it was addressed.”

He added: “This problem needs to be addressed. But it is not going to be sorted through further UK confrontation with the EU. Indeed, the terms of the current Protocol Bill (Westminster draft legislation) can’t directly solve this.

“The UK Government and the EU Commission need to negotiate a fresh, specific tariff rate quota for movements from GB into Northern Ireland and elsewhere in the EU, and in the longer term fix the Trade and Co-operation Agreement.

“The key ingredient for progress on this, alongside finding solutions on other protocol challenges, lies through building trust and confidence. Unilateral action, in particular the passage and implementation of the NI Protocol Bill, will be very counterproductive.”