The government said its plans were not about stopping steel trade and that imports would continue.
It said the quotas had been designed in a way that would maintain supply of steel and minimise impacts on the wider economy.
However, shadow business secretary Andrew Griffith said: “Raising the cost of imported steel means more cost for the construction industry, less infrastructure investment, and is a further blow to the diminishing number of firms making things in the UK.”
The UK’s steel industry has faced major financial difficulties in recent years due to high energy prices, increased tariffs and a glut of steel globally.
Despite recent measures to cut energy costs for intensive users, UK steel makers still face higher bills than their European and US rivals.
While most producers have bought their energy months in advance, surging energy costs remain a significant future threat, with fears the US-Israel war with Iran could cause prolonged disruption to supplies and a sustained spike in prices.
The government has a strong incentive to make UK steel attractive as it is in effective control of steel works in Scunthorpe and Rotherham which would have otherwise collapsed.
It is currently spending millions keeping furnaces burning at both sites.
Gareth Stace, director general of UK Steel, said for too long the UK had lacked a coherent plan for steel, which he said “underpins our national security, our energy transition, and the delivery of critical infrastructure”.
“This is a crucial moment: with global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives.”
The GMB union welcomed the announcement, but said it was waiting for detail, adding “questions around ownership of Scunthorpe and the future technology mix will be key to our members and their livelihoods”.