This is set to replace the 25% import tax the President slapped on imports earlier this year, which came into effect on 12 March. This situation represents a significant increase of US import tariffs that could affect trade flows between the UK and the US.
Despite the Prime Minister and the President’s agreement that UK steel imports would no longer face an import charge - announced on 8 May - the original 25% import tax has remained in place while officials iron out the detail of the decision.
Significance of the US Market and Tariff Impact on UK Steel Exports
UK Steel understands the new 50% charge will therefore likely affect all UK steelmakers’ US imports from Wednesday. The US is the UK’s second most important export market, worth around £400 million and totalling 9% by value of exports, therefore it is critical that this new steel tariff does not apply to UK steel imports to the US.
Industry Reaction and Call for Government Action on Import Tariffs
UK Steel Director-General, Gareth Stace, said: “The announcement that US steel tariffs could jump up to 50% on Wednesday is yet another body blow for all UK steelmakers in this torrid time. UK steel companies are this morning fearful that orders will now be cancelled, some of which are likely being shipped across the Atlantic as we speak.
“The deal that the Prime Minister and President Trump struck just a few short weeks ago is yet to be finalised, so this doubling of tariffs plunges the UK steel industry further into confusion. Uncertainty remains as to whether and when our second biggest export market will be open for business or is being firmly shut in our faces.
“UK Steel is now pressing our government to finalise the agreement to eliminate UK steel import tax and for it to come into effect urgently. UK steelmakers should not have to shell out for this new steep hike in US steel tariffs. All we want is to continue producing the steel our US customers value so highly.”
Ian Baxter, Founder and Chair of global logistics provider Baxter Freight said: “The temporary exclusion of the UK from additional US tariffs on steel and aluminium is great news for UK exporters and points the way forward to their complete removal under the US-UK Economic Prosperity Deal soon.
“Relative to other countries, this creates an advantage for UK exporters both immediately and going forward. Our manufacturers should waste no time in ramping up sales to the US based on their advantage. Baxter Freight covers the entire US by both sea and air, and stands ready to help customers move quickly.
“We believe the new trade pact with the US will be implemented quickly, and even in today’s fast moving environment have high confidence in future trade opportunities for British companies in the US, which is already our biggest individual trading partner (the EU is bigger collectively).”
Johnathan Dudley, Partner and Head of Manufacturing at Crowe, comments: “The UK’s manufacturing sector is facing significant challenges, from supply chain disruption to energy costs and skills shortages, and is now also grappling with uncertainty over global tariffs and yet another raw material supply crisis.
However, despite all this, the sector continues to demonstrate foresight, innovation and resilience. The government appears to be listening to the sector and there is a key drive to reshore, modernise and decarbonise UK manufacturing.
To enable the sector to play its crucial role in securing a more robust future for the UK, and to address the issues that persist, a dedicated Minister for Manufacturing will be essential.
Crowe’s ‘Art of Thrival’ process helps businesses to focus on doubling the power of resilience and opportunity, while identifying and limiting the impact of exposures and risks. Businesses will need to focus on what they can influence and change, and remain agile to navigate the uncertain world.”
Stephen Morley, CBM President, comments: “It’s no surprise in the survey results that companies are not optimistic about the future and it’s very concerning that over half are relying on internal cash reserves for investment, indicating limited access to external finance.
It is however encouraging to see those surveyed are moving toward technological adoption, resilience building, and strategic reshoring. Support from government policy, particularly through the upcoming Industrial Strategy whitepaper, will be critical in translating this momentum into long term competitiveness and growth.”
