The Government has been warned it must “act decisively” to protect the UK steel industry after Donald Trump announced a swingeing 25 per cent US import tariff.
The organisation representing the sector has warned Downing Street must respond to prevent a “fallout of rising global protectionism”. America is a key market for the UK, with around five per cent of British steel exports heading across the Atlantic.
However, the sector is already facing difficulties, and the new tariffs are expected to further strain struggling steelmakers. With the industry already on the back foot, this latest development could lead to reduced exports, forcing UK producers to look for alternative markets or face further hardship.
Trump’s surprise move, which also includes aluminium, will raise fears that Sir Keir Starmer’s appeals for the US leader to spare Britain from tariffs are being ignored.
UK Steel director general Gareth Stace said: “The imposition of US tariffs on UK steel would be a devastating blow to our industry. The US is our second largest export market after the EU.
“At a time of shrinking demand and high costs, rising protectionism globally, particularly in the US, will stifle our exports and damage over £400 million worth of the steel sector’s contribution to the UK’s balance of trade. It is deeply disappointing if President Trump sees the need to target UK steel, given our relatively small production volumes compared to major steel nations.
“The UK produces world-leading steel, supplying the US with high-quality products for defence, aerospace, stainless, and other critical sectors, materials that simply cannot be replicated elsewhere. At the same time, the introduction of further US tariffs will inevitably divert global trade flows, with excess steel potentially redirected to the UK market. This reinforces the urgent need for watertight UK trade measures in 2026 to prevent surges in imports following the UK’s steel safeguards expiry.
“Accelerating the UK’s CBAM to 2026 would provide an additional layer of protection against unfairly priced steel. The UK Government must act decisively to shield our domestic industry from the fallout of rising global protectionism.”
The trade union Community said tariffs on British steel would be “hugely damaging” for the UK and “self-defeating” for the US. Alasdair McDiarmid, Community’s assistant general secretary, said: “While we await full details and a formal policy announcement, the comments from the White House regarding new tariffs on steel are extremely concerning.
“At a time of uncertainty for the sector, a punitive new tariff on UK steel exports would be hugely damaging and threaten jobs. For the US it would also be self-defeating, as the UK is a leading supplier of specialist steel products required by their defence and aerospace sectors.
“Again, this just reinforces the need for a strong UK Carbon Border Adjustment Mechanism and for robust new measures to be put in place when existing safeguards expire to shield our steel sector from a surge in cheap imports.”
In response to Trump’s tariff threat, Downing Street said ministers will “engage as appropriate”. Asked if the Government was worried about the threat of tariffs, the Prime Minister’s official spokesman said the UK and US “work closely together on a range of economic issues, supporting jobs” on both sides of the Atlantic.
He added: “We will obviously continue to have those conversations with counterparts in the US. I haven’t seen any detailed proposals following the reporting overnight, but we will obviously engage as appropriate.”
Lord Mandelson is still awaiting formal recognition as the UK’s ambassador to Washington, No 10 indicated, but is able to work as the head of the British mission in the USA. The Prime Minister’s official spokesman would not comment on whether the UK would retaliate if the US imposed tariffs, describing the question as hypothetical.
The spokesman said the US accounted for five per cent of UK steel exports in 2023, adding that ministers were committed to supporting the industry in Britain. Home Office minister Angela Eagle added the government would “wait and see” the final proposals.
“We have a very balanced trading relationship with the US, I think £300 billion worth of trade between our countries, and I think it’s in the best interests of both of us, as long-standing allies and neighbours, that we carry on with that balanced trade,” she said. “We will have to wait and see whether the president gets more specific about what he meant by that comment on the way to the Super Bowl”.
The UK steel sector directly employs 33,700 people and a further 42,000 in the wider supply chain. In 2023, the UK steel industry directly contributed £1.8 billion to the UK economy, added £2.4 billion through supply chains and contributed £3.4 billion to the UK’s balance of trade.
UK Steel’s annual Key Statistics publication showed that in 2023, production and demand plummeted to new historic lows of 5.6 and 7.6 million tonnes, respectively, well below the levels seen even at the peak of the pandemic in 2020. UK production in 2022 had already reached its lowest level since the Great Depression, but in 2023, it dropped by a further six per cent, while demand fell by 14 per cent year over year.
Q&A – everything you need to know about tariffs
What are tariffs?
A tax, or duties, added to the cost of imported goods, often to make them more expensive than those produced domestically.
What has US President Donald Trump announced?
New tariffs will apply to “any steel coming into the United States”, he said, adding that the levy would also apply to aluminium. The tariff would be set at 25%, although he failed to give more details.
Canada is the largest source of steel and aluminium imports to the US, with Brazil, Mexico and South Korea also major providers.
What about the UK?
There is no word yet on whether the UK will be exempt from the tariffs.
But industry leaders are nervous, warning it would be a “devastating blow to our industry”. The UK exports around 200,000 tons of steel per year to the US, worth over £400million. The US is our second largest export market after the EU.
The UK steel industry is already reeling from years of cheap imports from countries such as China.
Tata began the closure of the last blast furnace at its Port Talbot plant in South Wales in September, resulting in nearly 2,000 job losses.
It is building an electric arc furnace instead – billed as a cheaper form of steel-making – but it is not due to be operational until 2027.
So would there be any implications if the UK escapes direct tariffs?
The concern is that countries hit by tariffs look at others to sell their excess steel, in a process known as “dumping”. China has been accused of using dumping in the past, undermining UK producers.
What is Trump’s strategy?
One theory is that he is using the threat of tariffs as a way to intimidate other countries into making concessions.
He has already delayed other tariffs on Mexico and Canada after seemingly gaining some ground.
