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Tariffs

Time Running Out for UK Steel Industry as Tariff Deal Leaves Sector Exposed

Strategic Insights

— 2 min read

The UK's steel industry is at a critical juncture as a US-UK tariff deal, announced in May, has left the sector exposed to heavy US import charges. The deal, which came into effect yesterday, spares car and aerospace firms in Britain from the swingeing duties imposed on their rivals elsewhere in the world. However, the steel and aluminium sectors, which employ thousands at sites including Tata Steel in South Wales and British Steel in Scunthorpe, are still subject to 25% tariffs despite an agreement to bring them down to zero.

Key Takeaways:

  • The US-UK tariff deal has left the UK's steel industry exposed to heavy US import charges, with 25% tariffs still in place despite an agreement to bring them down to zero.
  • The deal, announced in May, spares car and aerospace firms in Britain from the swingeing duties imposed on their rivals elsewhere in the world.
  • The steel and aluminium sectors face a double blow from the tariffs: they make it harder to sell to customers in America and mean that cheap goods from elsewhere, barred from the US, are flooding the British market.
  • UK Steel director-general Gareth Stace says "time is running out" to secure a UK-US steel deal and remove damaging tariffs, which are costing the industry dearly.
  • The Trump administration imposed steep tariffs on the global car, aerospace, and steel and aluminium industries earlier this year, with the US-UK deal reducing the pain for car makers.
  • The deal reduces duties on car sales into the US from 27.5% to 10%, though this is still higher than the 2.5% levels seen before.
  • Aerospace firms such as Rolls-Royce have seen tariffs reduced from 10% to zero, but UK firms may still be indirectly affected if they are part of global supply chains.
  • Losing out from the deal are UK makers of bioethanol, a fuel component, after the deal scrapped tariffs on imports from the US, prompting fears of plant closures and job losses.

Statistics:

  • 25% tariffs are still in place on steel imports from the US, despite an agreement to bring them down to zero.
  • The Trump administration imposed 27.5% duties on car sales into the US, which have been reduced to 10% under the US-UK tariff deal.
  • The deal reduces duties on steel and aluminium imports from the US, though this only lasts until July 9.
  • Two British plants making bioethanol face closure and hundreds of job losses after the deal scrapped tariffs on US imports.
  • The UK's steel industry employs thousands at sites including Tata Steel in South Wales and British Steel in Scunthorpe.

Sources:

  • Gareth Stace, director-general of UK Steel
  • Society of Motor Manufacturers and Traders (SMMT)
  • Business Secretary Jonathan Reynolds
  • The Trump administration
  • The US-UK tariff deal, announced in May

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