The UK and US are aiming to finalize a trade agreement by the end of July that would eliminate the Section 232 25% tariffs on British steel exports, according to official and public sources.
This follows recent progress in negotiations over quota eligibility and product scope, which had previously delayed the implementation of the tariff-lifting framework.
UK Prime Minister Keir Starmer is expected to meet US President Donald Trump in Scotland later in July during the president’s private visit to the country. The meeting, which will take place in an unofficial capacity, is expected to focus on finalizing the terms of the agreement. The US government has indicated the two leaders will revisit the deal reached in principle in May.
The framework for the tariff removal was set out in a White House document published on June 23, following an executive order signed by President Trump on June 16. The document outlines how the new quota system would work, and which steel products would be eligible for tariff removal, but it does not include a timeline for when the changes would take effect.
Under the proposed arrangement, the US would remove tariffs on UK steel in exchange for reciprocal reductions on UK tariffs for ethanol and beef. Progress had stalled due to technical disagreements over which steel products qualified under the new system.
Two of the UK’s largest producers — Tata Steel and British Steel — had faced uncertainty over their eligibility. Tata, which is transitioning to electric-arc furnace (EAF) production, has been importing semi-finished steel for finishing in the UK, which initially seemed to fall outside the scope of the deal.
“We welcome the progress the UK Government is making with the USA administration, in what is clearly a dynamic situation. We still very much hope that the UK and US governments can reach a positive trade agreement with zero tariffs for the UK steel sector, especially considering most of the products we supply into that market cannot be produced locally. Timing continues to be of the essence as we and our customers continue to be subject to 25% tariffs whilst negotiations are ongoing,” a Tata Steel spokesperson told Fastmarkets.
“A trade agreement with the US will not, however, negate the need for a replacement of the UK’s own safeguard measures with a more rigorous and efficient mechanism. This is necessary to ensure our domestic market remains competitive and is protected against undue and excess trade diversions which [are] significantly undercutting our UK business,” they added.
British Steel’s ownership by China’s Jingye Group raised concerns in Washington over potential trans-shipment risks, but after the emergency takeover of the company by the UK government in April, the issue is no longer on the table, Fastmarkets understands.
The UK exported approximately 180,000 tonnes of finished and semi-finished steel to the US in 2024, valued at £370 million ($496 million), according to trade association UK Steel. This accounted for 7% of the UK’s total steel exports by volume and 9% by value.
The US had threatened to raise tariffs on UK steel to 50% effective July 9 if a final agreement was not reached. A temporary reprieve was granted on June 3, with the US confirming that UK steel would continue to face the existing 25% tariff while negotiations were ongoing.
The move was described by Gareth Stace, director-general of UK Steel, as a “welcome pause,” but one that still leaves UK producers facing uncertainty over future access to the US market.
“Continued 25% tariffs will benefit shipments already on the water that we were concerned would fall under a tax hike,” Stace said in a press release on June 3. “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.”
Julia Bolotova in Brussels contributed to this article.
