Britain’s hope for zero tariffs on steel exports to the United States has been dashed.
According to the BBC, the proposed agreement to remove tariffs on UK steel exports to the US has been indefinitely suspended.
Currently, a 25% tariff is applied to steel exports to the US, which accounts for 6% of the UK’s total steel exports by volume and 9% by value.
Senior government officials emphasize that, despite this, the UK is still in a better competitive position compared to other countries, as other nations face tariffs of 50%.
Nevertheless, there is still hope for a better agreement, especially after Donald Trump, the President of the United States, mentioned reducing tariffs on UK steel prior to his second official visit to Britain.
Gareth Stace, Director of UK Steel, said on Wednesday that the steel industry is “disappointed.” Speaking on the BBC’s Today program, he stated: “On May 8, there was exciting speculation that we might secure a quota with no tariffs.”
In June, the UK and the US signed a trade agreement that reduced tariffs on imports of cars and aerospace products into the US. However, no agreement was reached on UK steel, and the 25% tariff remains in place.
Stace added that despite the efforts of the UK government, “this matter is not in their hands but in the hands of the US government.” He expressed hope that Trump’s visit could lead to a better agreement and added: “25% on unlimited exports might be better than a very limited quota with no tariffs, but paying 50% on the rest of the items will be difficult.”
Trump said he was “willing to help” the UK in revising the bilateral trade deal. He stated: “They want to see if they can adjust the trade deal a little. We have made a deal, and it is a great deal, and I am willing to help them. They want to have a slightly better deal. So we will talk with them.”
His remarks were welcomed by Peter Kyle, the UK’s new Trade Secretary, who said that reducing tariffs on UK steel is under negotiation.
Senior government officials still insist that “the path to achieving zero tariffs remains open.”
Over the weekend, Liam Byrne, the Labour Chair of the Commons Business and Trade Committee, stated that this official visit is “not merely a ceremonial show” and warned: “We cannot ignore the fact that the UK is now trading with its largest partner on weaker terms than before.”
The agreement for a rapid reduction of tariffs to zero in July was welcomed by both the government and the industry.
When the 25% tariff was first imposed, steel industry leaders described the move as “devastating.”
However, industry sources told the BBC on Tuesday that although the news is disappointing, the UK still holds a relative advantage over other producers facing 50% tariffs.
One of them added: this situation at least creates certainty for the industry, especially as the oversupply of cheap steel has driven many countries to impose trade barriers to protect their domestic industries.
He said: “We are still the only country benefiting from a 25% tariff on steel exports to the US, and this strengthens our position as a reliable source of high-quality steel.”
