UK hit by 25% tariff on steel & aluminium exports to US

UK hit by 25% tariff on steel & aluminium exports to US despite Starmer’s recent charm.

Prime Minister Keir Starmer was received with good graces at his White House meeting with Donald Trump back in late February. A royal invitation, humoured remarks about his “beautiful accent” and a shared resolve to cooperate with Ukraine were not tainted by previous comments on the US President by members of his cabinet. Foreign Secretary David Lammy referring to Trump as a “racist and neo-nazi sympathiser” back in 2017 had all been forgotten in this brief love-in.

Since then, however, the Trump administration has initiated a trade war against its Canadian and European allies. Despite hinting that a trade deal with the UK “could be worked out”, possibly protecting them from his tariffs, it appears the UK has not been exempted from a 25% levy on steel and aluminium imports from European countries.

Having gone into effect on the 12th of March, this has sparked disappointment amongst industry leaders. “I would hope that President Trump realises we’re his friend, not his foe,” said UK Steel Director Gareth Stace to GB News on the day the tariffs were imposed.

Even more crucial is the UK's response. Starmer has been reluctant to threaten immediate counter-tariffs, instead opting for a “pragmatic approach” in regards to what he has called a “disappointing” decision by the US administration. Whilst indicating that he will seek an economic deal with the US on the matter of trade, he has admitted that he will “keep all options on the table”.

None of this could have come at a worse time for the UK steel industry. The fallout from the invasion of Ukraine in 2022 spiked energy prices worldwide, massively increasing production costs for steel plants such as Tata Steel in the UK. 

Uncertainties over Brexit and global overcapacity (especially due to Chinese industries) have seen their sales suffer. As such, the Labour administration has been unable to prevent thousands of job losses at the Port Talbot plant owned by Tata Steel - with potentially 3000 to be made redundant. 

The government announced a £5m subsidy back in September 2024, yet the redundancies have continued, and can only be expected to become worse as US clients switch to cheaper suppliers in light of Trump’s tariffs.

Ed Davey of the UK Liberal Democrats, who conquered swathes of seats back in the 2024 general election, has urged Keir Starmer to take a stronger line on Trump’s actions. 

The liberal leader has consistently advocated for a closer partnership with “European friends”, involving entry into its customs union, to strategically counterweight protectionist moves from the Trump administration. 

He has been unimpressed by what he perceives to be “playground bully” tactics from the US President and has subsequently labelled their behaviour towards Canada as “reckless, irresponsible…and beyond appalling” in an interview with Canadian CBC News on the 12th March. 

Davey pressed pressure on Starmer in PMQs the same day to be more “robust” with the Americans, asking him if he’d visit Canada in a display of solidarity.

However, the prime minister may opt for a softer touch with the Trump Administration. Whilst noting that Canada was “an important ally” in response to Davey at PMQs, he made no promises to a Canadian visit. 

He has been reluctant to launch retaliatory counter-tariffs in exchange for a more compromising and mediatory attitude. He appears to be willing to distance himself from the European continental response so that he may leverage the UK’s historical ‘special relationship’ with the US. Response in the UK was generally positive following his White House trip, having rather unexpectedly struck collaborative chords with the President. Starmer may be able to repeat this.

If he can do so, then the royal invite he delivered may not have been in vain.