The steel issue is complex, but the general overview is simple. The Chinese government is attacking British (and other nations’) steel industries with a standard monopolistic tactic called predatory pricing; they undercut it by running at a loss and you can guarantee that when they’ve put the competition out of business they’ll hike the price up. The EU wanted to counter this by increasing tariffs on Chinese steel to make it nearer the real ‘market value’, but the UK blocked it. Note that predatory pricing is illegal under EU law too.
This isn’t a matter of the free market de-selecting an uncompetitive business, because the market here is not free.
The government’s response to this so far seems to be “oh, ok then”.
It’s important to avoid the collapse of the UK steel industry because:
1. Port Talbot has a population of around 35k and is simply not going to withstand suddenly losing 4k jobs. It will cripple the local area and since the taxpayer will end up subsiding it anyway via welfare we might as well subsidise the steel production because that way we also keep the skills and production capacity there.
2. Steel is important to the defence industry, and as we are one of the only countries in Europe who maintain a decent defence capability it would be wise if we continued to do that. China pressuring our defence capability, indirectly or not, isn’t something we should just shrug off.