UK and US Trade Deal: Steel Tariffs Still in Dispute

Strategic Insights -

The UK and US trade deal announced in May has seen the elimination of 25 per cent tariffs on steel and aluminium, but disagreements remain over the imposition of tariffs on UK steel exports. The deal was finalised by the Prime Minister and US President at the G7 summit, but steel tariffs were left at 25 per cent, rather than being reduced to zero as originally agreed. The Government has dispatched a trade delegation to the US to progress talks and finalise the removal of the steel tariffs, but concerns remain over the "rules of origin" for UK steel exports.

Key Takeaways:

  • The UK and US trade deal has seen the elimination of 25 per cent tariffs on steel and aluminium, but steel tariffs have not been reduced to zero as originally agreed.
  • The Government has dispatched a trade delegation to the US to progress talks and finalise the removal of the steel tariffs.
  • Business Secretary Jonathan Reynolds has stated that the UK would need to get exemptions for steel produced in Port Talbot to meet the US "rules of origin".
  • The Government has taken control of the Scunthorpe steelworks from Chinese owner Jingye to ensure there were enough raw materials to keep the blast furnaces lit.
  • The Support Steel Charter will be introduced to protect the domestic industry from surges in foreign imports.
  • Certain country-specific limits will be put in place to cap the levels of some steel imports to the UK.

Statistics:

  • 25 per cent tariffs on steel and aluminium have been eliminated, but steel tariffs remain at 25 per cent.
  • 10 per cent tariff quota will be applied to car manufacturers exporting to the US, down from 27.5 per cent.
  • 10 per cent levy will be removed entirely from the aerospace sector.
  • The UK steel sector exports £4.5 billion worth of steel to the EU annually: [1]
  • Tata Steel's Port Talbot plant is the key issue in the dispute over the "rules of origin" for UK steel exports.
  • The Scunthorpe steelworks has been under Government control since earlier in the year to ensure there were enough raw materials to keep the blast furnaces lit: [2]

Sources:

[1] The Yorkshire Post, 2023.

[2] The Yorkshire Post, 2023.

(Note: The provided article does not contain explicit statistics regarding the number of families and communities dependent on steel production in the UK, so that statistic has not been included in the article.)