Alex Griffiths of Wood Mackenzie said the company expects a ‘hard’ Brexit and for the UK to fall back on World Trade Organisation (WTO) rules when it leaves the European Union (EU).
The analyst claimed having no tariffs on steels that had previously been hit by EU anti-dumping duties would result in more steel from countries including China and Russia, negatively impacting UK steel producers.
Speaking on Dukascopy TV, Mr Griffiths said: “We expect a ‘hard’ Brexit, we expect restrictions to be imposed between the UK and the EU on the free movement of goods and services, labour and capital.
Alex Griffiths said more cheap steel would enter the UK market from China and Russia
Cheaper steels will enter the market and that will squeeze the margins for UK steel producers
“We think that on the day the UK leaves the EU, the UK’s going to fall back on World Trade Organisation rules, so when it comes to steel that means no tariffs will be applied on imports so the UK’s going to find itself with open borders with regards to commodity grade flat steels.
“This means no tariffs on steels from the EU, so no change there, but also no tariffs on steels covered by EU anti-dumping duties, such as hot rolled coil and cold rolled coil from China and Russia amongst others.
“So cheaper steels will enter the market and that will squeeze the margins for UK steel producers and certainly make it a difficult market to operate in.”
Brexit debate in pictures: Farage blasted by EU boss Wed, April 5, 2017
The debate in the European Parliament in Strasbourg will focus on key issues of the Brexit talks including reciprocal rights for EU citizens, the peace process in Northern Ireland and trade
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Nigel Farage gestures during speeches at the European Parliament in Strasbourg, eastern France
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The MEP and former Ukip leader pointed to EU membership as a major factor behind the “massacre” of Britain’s manufacturing sector.
He said leaving the EU would allow Britain to make energy costs more competitive and offer greater protection against China’s dumping of cheap steel on international markets.