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Tariffs

UK Steel Industry Urges Rapid Deal to Protect Against Tariffs

Strategic Insights

— 2 min read

The UK steel industry is "absolutely vital" that a deal to protect against Donald Trump's tariffs is secured as soon as possible. The industry was initially excluded from a UK-US trade deal signed on Monday night, which significantly reduced tariffs on the automotive sector from 27.5% to 10%. However, tariffs on steel imports from the US remain at 25%, with the UK steel industry facing a potential threat of 50% tariffs on 9 July.

However, it's now absolutely vital that a deal for steel is secured as soon as possible. Our steel producers and their US customers need an end to the current state of uncertainty to allow normal business to resume. Crucially, we must see a full exemption for all UK steel exports to the US -- without that guarantee some of our leading steel businesses could be left behind, with a threat to jobs and livelihoods.

The UK steel industry desperately needs clarification over the 'melted and poured' requirement, and the level of quotas available to UK steelmakers, so that they can restore the historical trade routes that have served both the UK and the US economies for many years. Alasdair McDiarmid, the assistant general secretary of the steel union Community, emphasized the need for a swift agreement, stating that UK steelmakers still face 25% tariffs, although this is lower than the global tariff of 50% imposed by the Trump administration on other nations.

Key Takeaways:

  • The UK steel industry is pushing for a rapid deal to protect against Donald Trump's tariffs, which have remained at 25% despite the reduction of tariffs on the automotive sector to 10%.
  • The industry is seeking a full exemption for all UK steel exports to the US to avoid the risk of 50% tariffs on 9 July.
  • The UK steel industry urgently needs clarification on the 'melted and poured' requirement and the level of quotas available to UK steelmakers to restore historical trade routes with the US.
  • Tata Steel, the UK's largest steelmaker, faces uncertainty over its inclusion in tariff-free access to the US due to concerns over its Indian ownership and potential US product origin requirements.
  • British Steel, under government control, may also face issues due to Chinese ownership and potential US product origin requirements.
  • The UK-US trade pact was negotiated in early May, but the reduction of tariffs on the automotive sector is yet to be implemented, which will allow manufacturers to start shipping without being subject to punitive tariffs.

Statistics:

  • Tariffs on the automotive sector are being reduced from 27.5% to 10% due to the UK-US trade deal.
  • Tariffs on steel imports from the US remain at 25% for the UK steel industry.
  • The UK steel industry faces a potential threat of 50% tariffs on 9 July if a deal is not secured.
  • Tata Steel exports over $100m (£74m) worth of goods to the US every year.
  • The new five-year supply contract between British Steel and Network Rail is worth over £500m.
  • The UK automotive sector has been waiting for the implementation of the tariff reduction for over two months, with some manufacturers halting shipments.

Sources:

  • Alasdair McDiarmid, assistant general secretary of the steel union Community
  • Gareth Stace, director general of the trade body UK Steel
  • Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders
  • Press release from the UK business department on the UK-US trade deal
  • Executive order signed by Donald Trump on the UK-US trade agreement

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