The 25% tariff on steel and aluminium imports into the US announced in March has been scrapped. At a time where the tariff war is putting extra pressure on countries to be more self-sufficient, Trump’s decisions present a complex challenge for all stakeholders.
Metals expert and Chairman at metals4U, Paul McFadyen, shares his insights into the possible effects of the tariff deal on the UK’s metal industry, and what the news means for manufacturers in this highly uncertain time.
Paul says, “The US is a crucial market for British steel, and the tariffs threatened to severely disrupt this trade. The US was the UK’s second-largest export market for steel after the EU in 2023. The jobs that this sector supplies tend to be highly skilled and well rewarded. People might struggle to find comparable jobs in these areas, meaning job losses could be devastating for certain communities. The news is good for firms like British Steel who were struggling to stay operational.”
What does this mean for the UK’s already declining steel sector?
Paul shares, “It is a highly volatile and uncertain time at the moment. The US tariffs presented a serious challenge to our metals industry, adding pressure to an already strained sector.
“The last blast furnaces left operating in Britain, British Steel in Scunthorpe, are also facing a volatile time. After recently being taken under government control to continue production, the UK is preparing to continue its vital steelmaking capabilities that are integral for our construction, transport, and infrastructure sectors.
“With an industry that used to employ hundreds of thousands, the decline of Britain’s steel industry has, and will, continue to have profound economic consequences. Sheffield used to be an integral part of the industry, producing almost half of Europe’s entire steel supply in the mid 19th century; now it has joined numerous other towns and cities in economic stagnation.
“The tariff deal is not completely straight-forward, and it could take time to see the benefits. Perhaps as an attempt to preserve an economic relationship, the government has previously committed to a £2.5bn investment to rebuild the UK’s steel industry.
“A strong and sustainable British steel industry is essential in working towards a greener economy and creating jobs. Instead of importing steel, we should be investing in domestic production, especially in such an uncertain geo-political climate.
“It comes down to the need for enough UK sites producing steel at prices that can compete with suppliers abroad; this is why we should look into reviving the declining sector.”
What are firms doing to mitigate against the impacts?
Paul explains, “We are seeing groups within the industry call for capped energy prices to compete with other countries in Europe, such as France and Germany. This is because the British steel industry is already at a disadvantage due to high electricity costs.
“Steel businesses in the UK will be eager for the government to continue conversations over trade agreements with the US to restore certainty. Firms will need to know what supply chain conditions need to be met, and what the White House’s announcement of quotas will effect.”
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