UK steelmakers have managed to narrowly evade a potentially crippling 50% import tariff by the United States — at least for the time being — after President Trump signed an Executive Order confirming that the UK will remain under the current 25% tariff while a new bilateral agreement on steel is finalised.
The temporary relief follows warnings that British steel exports might face a significant increase from Tuesday, due to the White House’s decision to double tariffs on imports from nations not benefiting from trade exemptions. The UK, presently subjected to the initial 25% tariff imposed in March, has been granted a brief reprieve until 9 July, by which time the Economic Prosperity Deal (EPD) between the UK and US must be completed.
UK Steel, in a statement, described the decision as a “time-bound vote of confidence” in British steelmakers. Nonetheless, it cautioned that the lack of clarity regarding final tariff rates and deal timing poses a risk to transatlantic trade stability, as apprehensive US buyers may consider alternative supply sources.
Gareth Stace, UK Steel’s Director-General, appreciated the breathing space provided: “The President’s decision not to impose a 50% tariff on UK steelmakers, but to keep the rate at 25% while the UK-US deal is completed, is a welcome pause. The Business Secretary, Jonathan Reynolds, acknowledges the importance of maintaining steel trade stability and security between our two countries and has acted decisively.”
Stace further mentioned that retaining the 25% rate would protect British producers from immediate disruption on shipments already underway, although US customers now face uncertainty. “Uncertainty regarding timings and final tariff rates remains, and US customers are now uncertain whether to risk placing orders with the UK.”
The US ranks as the UK’s second-largest export market for steel, valued at approximately £400 million annually and representing 9% of the UK’s total steel exports by value. Improved trade relations were anticipated following the May announcement of the UK-US Economic Prosperity Deal, promising to eliminate current tariffs and implement a quota-based system allowing tariff-free trade within specified limits. However, this deal is yet to be completed and legally established, leaving exporters in a state of ambiguity.
This situation highlights the challenging balancing act facing the UK Government, which must strive to maintain its trading ties with Washington while safeguarding a domestic steel industry coping with intense global competition, low demand, and increasing import pressures.
Stace urged both nations to expedite efforts: “The US and UK must urgently transform the May deal into reality to completely remove the tariffs. With global oversupply and weak demand already impacting our steel industry, continued cooperation is essential to support sales levels in our second most important export market.”
He also reiterated calls for more robust domestic trade defence measures, pointing to a surge in steel imports from outside the EU. “There’s clear evidence of trade diversion accelerating into the UK following the EU’s enhanced trade defences, and we must follow suit. Imports are pouring into the UK market, depressing steel prices and reducing market share. We must not lose focus on our domestic market as we aim to stabilise exports to the US.”
The UK Government has yet to confirm a timeline for the finalisation of the steel trade agreement, but with the 9 July deadline approaching, urgency is increasing to provide long-term certainty to the sector. Without it, industry leaders warn of possible job losses and production cutbacks, potentially threatening the fragile recovery of UK manufacturing.
Read more: [UK steelmakers avoid immediate 50% US tariff, but face growing uncertainty as deal hangs in the balance](https://bmmagazine.co.uk/news/uk-steelmakers-avoid-immediate-50-us-tariff-but-face-growing-uncertainty-as-deal-hangs-in-the-balance/)
