British Steel crisis derails China’s tariff-bypass strategy
The UK government is moving to potentially nationalize British Steel, which has become a point of contention with its Chinese owner, Jingye Group. Jingye acquired the company in 2020 but has struggled with significant losses and rejected a state rescue package. The UK Parliament is considering a bill that would allow for the nationalization of steel companies to protect jobs and the domestic steel industry.
- ▪Jingye Group acquired British Steel for £70 million in 2020 but has faced annual losses of £250 million.
- ▪The UK government introduced a Steel Industry (Nationalization) Bill to allow for the nationalization of steel companies if deemed necessary for public interest.
- ▪The Chinese Ministry of Commerce has urged the UK to consider Jingye's investments and contributions to the British economy.
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A Chinese steelmaker’s attempt to use British Steel as a foothold in Western markets has turned into a political dispute, after the UK government introduced a bill that could nationalize the eastern England-based company. Jingye Group, a privately owned steelmaker based in Hebei province, acquired British Steel for £70 million (US$91 million) in 2020, partly in the hope that owning production capacity inside Britain would help it bypass US tariffs on Chinese steel. In June 2018, the Trump administration imposed an initial 25% tariff on steel imports from China, citing national security concerns under the Trade Expansion Act.
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