Steel tariff impact on Defence Investment Plan still unclear

The Ministry of Defence is working with the Department for Business and Trade to identify defence product categories likely to be affected by a new 50 per cent steel tariff coming into force on 1 July, the department stated in a written answer to a parliamentary question.

Conservative MP Dame Harriett Baldwin had asked the Secretary of State for Defence whether an assessment had been made of the potential impact of the tariff, being implemented under the Business and Trade Secretary’s authority, on the cost of the Defence Investment Plan.

Minister for Defence Readiness and Industry Luke Pollard’s response acknowledged that work to map the implications for defence procurement is still under way.

Pollard said the “UK Government’s Steel Strategy introduced a new trade measure, due to be implemented 1 July 2026 which links the reduction of tariff-free import quotas to protecting the nation’s defence manufacturing capabilities and national security.” He continued: “By capping cheaper foreign imports, the policy aims to prevent the total erosion of the UK’s domestic steel industry.”

On the question of how the measure interacts with defence procurement, the minister said: “Where specialist steel required for defence is not produced in the UK, the Ministry of Defence is working with the Department for Business and Trade to identify affected product categories and ensure appropriate mitigations are in place, including maintaining access to essential inputs without unnecessary tariff impact.”

The Defence Investment Plan itself remains unpublished, with Pollard saying the government will release the document “as soon as we can” and that the aim is to ensure decisions taken within it are “robust and support the development of both current and future capabilities.”

The MoD will continue to monitor UK steel trade measures and work with the Department for Business and Trade and industry to assess potential impacts on defence, he said.