UK steel industry warns of damage as Trump tariffs come into force

LONDON: US President Donald Trump's tariffs on UK steel "couldn't come at a worse time," the industry has warned as the levy on US imports is introduced, reported PA Media/dpa news.

The British steel and aluminium industries are braced for the impact of the US president's tariffs, which came in at midnight in the US, around 0400 GMT.

The UK government is unlikely to immediately retaliate to the 25 per cent import tax, with officials stressing the need for a "cool-headed approach", after last-ditch efforts to persuade Trump to spare British industry from his global tariffs appeared to have failed.

The European Union announced it would be implementing counter tariffs on US$28 billion worth of goods starting on April 1.

Gareth Stace, the director general of trade association UK Steel, branded the Trump administration's move "hugely disappointing."

He added: "President Trump must surely recognise that the UK is an ally, not a foe. Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.

"These tariffs couldn't come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape. What's more, the EU is also pushing ahead with trade restrictive action that will amplify the impact of US tariffs."

Stace added: "It is essential that the UK Government not only continues efforts to negotiate exemptions with the US but also takes decisive action to bolster our trade defences. We greatly appreciate all the efforts that have been made so far and will continue working closely with our Government to secure the best possible outcome."

The aluminium industry body had earlier warned that the looming import taxes were already having an effect.

Nadine Bloxsome, chief executive of the Aluminium Federation, said: "The UK aluminium sector is already seeing the first impacts of these tariffs.

"The sharp rise in US premiums has created new incentives for scrap exports, raising the risk of significant domestic scrap leakage. This not only weakens the UK's recycling capacity but risks undermining our sustainability objectives and circular economy targets.

"Additionally, the uncertainty around potential trade diversion is placing considerable pressure on UK producers, especially as semi-finished goods may flood the UK market at lower costs.

"This could severely destabilise the competitiveness of UK aluminium manufacturers, who are already contending with high energy costs and complex regulatory challenges."

William Bain, head of trade policy for the British Chambers of Commerce (BCC), said the decision plunged both countries "into a new age of uncertainty."

He said: "BCC research shows that 63 per cent of our manufacturing exporters were concerned about the impact of tariffs before their introduction.

"But today's setback does not mean we have reached the end of the road in terms of negotiations. Tariffs can be lifted at any time.

"Businesses will be looking to the UK Government to continue dialogue, with the US, to resolve this situation and restore certainty for firms, which has been badly lacking over recent weeks."

He continued: "Against this background, a series of tit-for-tat tariffs could easily spiral into an all-out trade war and would do the UK little benefit.

"We must keep talks alive and retaliatory tariffs should only be used as a means of last resort. If talks succeed, it would be a win-win, bringing welcome stability and pro-growth economic conditions for both sides."

The issue was discussed in a call between UK Prime Minister Keir Starmer and Trump on Monday, and ministers and officials have been in frequent talks with their US counterparts since the measures were first proposed in February.

The UK prime minister's official spokesman said the government was "engaging closely with the US and we remain prepared to defend the UK's national interest where it's right to do so."

He added: "The Government's committed GBP2.5 billion [US$3.2 billion] of investment to rebuild the UK steel industry and support communities now and for generations to come."

The government estimates around 5 per cent of UK steel exports and 6 per cent of aluminium exports by volume go to the US, although the aluminium industry body said the US market accounted for 10 per cent of exports - valued at GBP225 million.

Trump has previously threatened to impose tariffs on other countries and then relented, but he remains wedded to the overall idea of making the US richer through taxing imports.

In a sign of the US leader's unpredictable approach, on the eve of the tariffs coming into force, he threatened to double the rate for Canadian metal imports from 25 per cent to 50 per cent, before backtracking at the last minute.

Downing Street said there were "multiple engagements at multiple levels" with the US administration as the Government attempted to spare UK exporters from the tariffs.

--BERNAMA--PA Media/dpa

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