In a letter seen by The Yorkshire Post to International Trade Secretary Liz Truss Labour say the proposed removal of safeguards "could be the final straw that forces some factories and steel mills to close down for good".
The Government’s Trade Remedies Investigations Directorate (TRID) recommended on Wednesday that a number of measures to protect the UK steel industry from imports be cut from July.
Under current restrictions that were put in place when the UK was a member of the European Union, 19 types of imported steel were subject to tariffs and quotas to safeguard UK suppliers.
TRID has recommended removing restrictions on nine types of steel, but maintaining restrictions on the remaining 10 for at least another three years.
It claimed the steel types to have import rules eased were not manufactured in the UK or there was no increase in imports. Stainless steel bars and metallic-coated sheets are among the items that could see import restrictions lifted.
In a letter to Leeds-educated Ms Truss, Labour's Shadow Trade Minister Bill Esterson and Shadow Business Minister Seema Malhotra have demanded that she override the advice of TRID and keep in place all existing safeguards against unfair trading practices in the global steel market.
But the Government says it can only choose between accepting TRID's recommendations or see the safeguards expire at their end date.
Labour has described the TRID recommendation as reinforcing “long-standing concerns” the part has raised regarding the implementation of the Trade Remedies Authority by DIT. In the letter, Labour states that there has not been enough emphasis on “the fair safeguards which domestic producers and their workers should expect from their government.”
It says: "If you remove some of those safeguards in the way TRID has recommended, the UK is likely to become a magnet for large quantities of foreign steel.
"A two per cent increase in global overproduction could decimate all demand for British steel and the removal of safeguards could be the final straw that forces some factories and steel mills to close down for good.
"The TRID recommendation also suggests a worrying misunderstanding of how the steel industry works in the UK. The full spectrum of measures is designed to protect the viability of steel as a whole – not just individual production lines.
"Indeed, the removal of safeguards suggested to you by TRID would mean the manufacture of steel sections, tubes, wire-rods and plates in the UK are all put at risk, with huge consequences for jobs and communities in Teesside, Hartlepool, Cardiff, Scunthorpe, Rotherham, Motherwell and elsewhere who rely on these industries for their livelihoods."
After the preliminary decision by TRID was announced on Wednesday there will be a seven-day period in which interested parties can comment on the report.
TRID will then consider and produce a Final Determination, which will be sent to Ms Truss who will make the final decision on whether to uphold TRID’s recommendation.
Last month, a report said Yorkshire and the North could become a world leader in green steel in a move which could save thousands of jobs across the region if Ministers and industry leaders "act now".
The region's historic but carbon-intensive steel industry could achieve net zero status by 2035, according to think-tank IPPR North, by harnessing the potential of electrification, carbon capture storage, and hydrogen technologies.
Its report, backed by many of the region's politicians and business figures, says decarbonising northern steel would cost an average of £267m a year by 2050 but would "help lay the foundations for a stronger, low-carbon and productive industry".
And it says the rewards and acting quickly could be "significant", with economies around the world likely to start imposing extra charges on materials produced with more polluting methods.
High-quality technical and vocational education will be crucial to create the skills pipeline that industry in the North will need, meaning the low-carbon steel industry of the future "must start training the workforce of tomorrow, today".
It comes amid uncertainty for the industry's short-term future, with the collapse of lender Greensill Capital threatening thousands of jobs at Liberty Steel's sites in Rotherham, Stocksbridge and Scunthorpe.
On Tuesday May 25, MPs on the Business, Energy and Industrial Strategy Committee will be questioning Business Secretary Kwasi Kwarteng about Liberty Steel and the future of the steel industry in UK.
The hearing is likely to question the Secretary of State on the Government’s assessment of Liberty Steel and any steps it may take to intervene, and also examine the lessons which have been learned since the last major crisis in the steel industry in 2015-16.
A Department for International Trade spokesman said: “We have a robust trade remedies framework via the TRID to protect UK producers from unfair trading practices and unforeseen surges in imports. This government supports free trade for British steel manufacturers.
“The Secretary of State has limited powers in relation to the TRA, and only has the choice under law to accept the TRA’s recommendation, or see safeguard measures expire at their end date.”