Trump tariffs could have ‘devastating blow’ on steel industry
The UK steel industry could suffer a “devastating blow” if President Donald Trump imposes new 25 per cent tariffs on all steel and aluminium imports, an industry body has warned.
Speaking from Air Force One last night, Trump said he will impose a 25 per cent duty on steel and aluminium imports entering the US.
He did not confirm whether this will replace or be levied on top of existing steel duties, but warned that it would impact “everybody”.
Gareth Stace, director general of UK Steel, said: “It is deeply disappointing if President Trump sees the need to target UK steel, given our relatively small production volumes compared to major steel nations.”
“The imposition of US tariffs on UK steel would be a devastating blow to our industry,” he added.
Last year the UK exported 165,000 tonnes of steel to the US, worth £388m.
Stace said the UK produced steel that “simply cannot be replicated elsewhere” for sectors like defence, aerospace, and other critical sectors.
Speaking on Times Radio, Paul Johnson, director of the Institute for Fiscal Studies, said the tariffs “may well be enough to end that particular bit of our steel exports.”
Asked about the steel tariffs, Home Office minister Angela Eagle said the government will have to “wait and see” exactly what Trump means.
“We have a very balanced trading relationship with the US – I think £300bn worth of trade between our countries – and I think it’s in the best interests of both of us, as longstanding allies and neighbours, that we carry on with that balanced trade,” she said.
Tom Clougherty, executive director at the Institute of Economic Affairs, said the UK should not impose retaliatory tariffs on the US.
“Tariffs are a tax on domestic consumers,” he said. “That logic doesn’t change just because other countries impose tariffs on the import of your goods. Retaliatory tariffs simply add to the pain.”
Alongside his steel announcement, Trump also said he would announce reciprocal tariffs later this week on countries who levy tariffs on US imports.
The measures will be put in place “almost immediately” after being announced, he said.
The comments come shortly after China put in place retaliatory tariffs on a range of US goods, including energy commodities, agricultural machinery and high-performance cars.
Victor Gao, a Chinese diplomat and economist, told the BBC that the tariffs were “truly tit-for-tat because China wants to have free trade for all of these things”.
Trump put in place a 10 per cent blanket duty on all Chinese imports last week.
Kathleen Brooks, head of research at XTB, said the measures “essentially start a new trade war between the two largest global economies”.
Despite the tariff news, markets were largely unfazed, with European markets rising in early trade while Asian markets closed higher on Monday too. US futures were also called to open higher.
“Risky assets are getting a bit desensitized to Trump’s tariff announcement,” Mohit Kumar, an analyst at Jefferies said.
Derren Nathan, head of equity research, Hargreaves Lansdown said “markets are largely taking unfolding events in their stride”.