Tata Steel UK has warned that US President Trump’s 50% tariff on steel and aluminium could threaten its operations if a melt-and-poured condition is included under a UK-US trade agreement.
CEO Rajesh Nair urged the UK government to “secure a deal as soon as possible” in a statement 6 June, due to Tata’s continued reliance on imports to feed its supply chain.
“Tata Steel UK will need to import steel substrate until Electric Arc Furnace steelmaking is operational in Port Talbot from late 2027 onwards,” Nair said.
Blast furnace operations were terminated at the Port Talbot site in October last year, to facilitate a transition to less-carbon intensive electric-arc furnace production (EAF). The renovation was partly financed with £500m of public funding, scheduled for completion in late-2027.
In the meantime, Tata has predominantly resorted to importing steel melted in its associated operations in India and the Netherlands. US President Trump’s latest tariff offensives – namely the now-50% tariff rate on steel imports – threatens to undermine the competitiveness of Tata’s exports to the US if the company is not granted specific consideration in UK negotiations with Trump’s administration.
The UK government is looking to ensure the tariff rate falls to zero in finalizing details of the US-UK Economic Prosperity Deal (EPD), the general terms of which were signed 8 May.
The EPD states that “[t]he United Kingdom will work to promptly meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities.”
If satisfied, the US will create a quota for UK steel exports at most favoured nation rates.
This indirectly refers to the UK government’s passing of emergency legislation to seize control of Chinese-owned British Steel earlier this year, motivated by fears of long-term damage to the UK’s sole active steelmaking assets in Scunthorpe if the furnaces were allowed to run out of raw materials and cease production.
Influenced by the deal, the UK was temporarily spared from the 50% rate – instead facing a reduced US steel tariff of 25% – but possible imposition of a melt-and-poured condition for future tariff-exemptions have raised concerns for Tata and their US export portfolio.
“[O]ur mills continue to transform imported steel coil and slab into high-value, specialist products which are not available from US producers and are therefore essential to our US customers,” said Nair. “It is therefore critical for our business that melted and poured in the UK is not a requirement to access the steel quotas in any future trade deal.”
Tata already has a carve-out from the UK’s own safeguard measures under product category 1B, structured to ensure Tata and other importers can continue to competitively service the UK’s downstream markets with imported hot-rolled coil.
Trump has stated that the tariff on the UK may be increased “on or after July 9,” contingent on whether the US “determines that the United Kingdom has complied with relevant aspects of EPD”.
Nair says that Tata “would be happy to provide the US Government with any needed assurances on the provenance and processing of the steel we supply.”
