UK Steel Industry Reels as Trump Doubles US Tariffs to 50%
UK steelmakers have voiced strong concern and frustration following US President Donald Trump’s decision to double import tariffs on steel and aluminium, raising the rate from 25% to a steep 50%. The industry trade group, UK Steel, described the move as “yet another body blow” to a sector already facing significant challenges and uncertainty.
The abrupt increase, set to take effect on Wednesday, replaces the earlier 25% import tax. This announcement is particularly confusing and damaging because it comes just weeks after the US and UK reportedly reached an agreement on May 8th to drop import taxes on UK steel as part of a broader trade deal. However, the original 25% tariff had remained in place while the specifics of that deal were being finalized.
Confusion and Fear Grips Steelmakers
According to Gareth Stace, director general of UK Steel, the lack of finalization on the agreed exemption deal, coupled with the doubling of tariffs, “plunges the UK steel industry further into confusion.” Speaking on behalf of the sector, Stace highlighted the immediate fears among companies that this hike could lead to the delay or outright cancellation of existing orders. Worryingly, this includes shipments that may already be halfway across the Atlantic.
“It is yet another body blow for all UK steelmakers in this torrid time,” Stace stated, emphasizing the urgency for the UK government to finalize the agreement to eliminate the US import tax on UK steel and ensure its swift implementation. He argued that UK steelmakers should not be forced to bear the cost of this new, steep increase and simply want to continue supplying their valued customers in the US.
UK Government Responds Amidst Diplomatic Efforts
A spokesperson for the UK government acknowledged the situation, stating they are actively engaging with the US authorities to understand the implications of the latest tariff announcement and provide clarity to the industry. The government reaffirmed its commitment to protecting British businesses and jobs, highlighting that the UK was the first country to secure a trade deal with the US earlier in May.
Further diplomatic efforts are planned. UK Business Secretary Jonathan Reynolds is reportedly scheduled to meet his US counterpart, Jamieson Greer, at an OECD meeting in Paris next week. A key objective of this meeting will be to discuss and agree on a timeline for the UK’s exemption from the US steel tariffs, aiming to finally resolve the issue stemming from the May 8th agreement.
Why the US Market Matters & Global Implications
While the UK exports a relatively modest amount of steel and aluminium to the US – valued at around £700 million annually – it remains an important market for the sector. The situation for the UK is potentially simpler to resolve than for other nations due to the unique nature of the specialist steel often exported, which is crucial for critical applications like nuclear submarines. Experts note that the US would likely struggle to source this specific type of steel elsewhere, underscoring the potential for mutually beneficial, tariff-free trade.
However, the unpredictability surrounding US trade policy remains a significant factor. President Trump has publicly stated that his aim in raising tariffs is to bolster the domestic US steel industry, enhance national supply security, and reduce reliance on foreign sources, particularly China. This broader strategic goal provides the context for the tariff action, even as it causes friction with close allies like the UK.
Adding to the international pressure, the European Commission has also expressed “strong regret” over the US tariff increase. The EU views the move as adding further uncertainty to the global economy, increasing costs for consumers and businesses, and undermining ongoing negotiation efforts to resolve trade disputes. The Commission warned it is prepared to respond with countermeasures, potentially including expanded measures, if a mutually acceptable solution isn’t reached by July 14th.
Ultimately, despite a supposed deal to drop tariffs, the doubling of the rate creates immediate complications and costs for UK steel businesses trading with the US. The situation highlights the uncertain nature of international trade policy, leaving UK steelmakers anxious for the agreed exemption to be finalized urgently.
References
- https://www.bbc.com/news/articles/c17rzvvzr0ko
- https://www.bbc.co.uk/news/articles/c17rzvvzr0ko
- https://www.bbc.com/news/articles/cy0k5x21y35o
- https://www.aol.com/eu-commission-strongly-regrets-trumps-172750748.html
- https://au.finance.yahoo.com/news/trump-tariffs-live-updates-eu-matches-trumps-90-day-pause-on-tariffs-kicking-in-191201532.html
