UK Steel has welcomed the US decision to keep tariffs on UK-origin steel imports at 25%, but says the US-UK deal agreed in May must be implemented urgently to remove tariffs completely – as well as uncertainty.
US President Donald Trump signed on Tuesday the proclamation that increases the levy on steel and aluminium products from 25% to 50%, effective 4 June (see Kallanish passim). Contrary to UK steelmaker concerns last week, when Trump first announced the tariff doubling, the levy on UK steel remains unchanged to allow for the implementation of the US-UK Economic Prosperity Deal signed on 8 May.
Although the UK exemption is a vote of confidence for UK steelmakers’ ability to continue supplying the US market, it also creates further uncertainty, which is disruptive, says UK Steel.
“Continued 25% tariffs will benefit shipments already on the water that we were concerned would fall under a tax hike. However, uncertainty remains over timings and final tariff rates, and now US customers will be dubious over whether they should even risk making UK orders,” notes the association’s director general, Gareth Stace.
“The US and UK must urgently turn the May deal into reality to remove the tariffs completely. At an already crushing time for our steel industry, with global oversupply and weak demand, we must continue to work together to support sales levels in our second most important export market,” he adds.
On or after 9 July, the US will likely finalise the agreement to replace tariffs on UK steel with tariff-free quotas, or choose to pull tariffs up to 50% for the UK.
The UK must also provide added protection for its steel market, as there is evidence that trade diversion is “switching gears” into the UK after the EU stepped up its trade defences, Stace says. “We must not lose sight of our domestic market while battling to stabilise exports to the US,” he concludes.
Adam Smith Poland
