UK tightens steel import quotas as cheap Chinese supply tests free trade

The UK is forging a sturdier trade shield by cutting tariff-free steel imports and doubling tariffs on shipments above the new quota, aiming to protect domestic producers from a global glut of low-priced Chinese steel. The move reflects classic protectionism: safeguarding jobs and productive capacity, but at the risk of higher costs for steel-using firms and reduced consumer welfare. It is a delicate balancing act between correcting market distortions caused by international overcapacity and avoiding the unintended consequence that today's industrial lifeline becomes tomorrow's cost inflation.

UK to halve tariff-free steel imports to counter glut of cheap Chinese metal | Steel industry | The Guardian

1. Explain the difference between a tariff and a quota.

2. Examine TWO potential economic consequences of the UK’s decision to cut tariff-free steel imports.

3. Discuss whether protectionism is justified in the UK steel industry.