UK-US steel agreement put on hold

The BBC understands that a proposed deal to eliminate tariffs on UK steel exports to the US has been put on hold indefinitely.

Tariffs of 25% are currently applied to steel exports to the US, which make up 6% of all UK steel exports by volume and 9% by value.

Other countries face tariffs of 50% and so senior government sources insist that the UK is in a competitive position relative to others, and added they believed there, although senior government sources insist there “remains a path to zero”.

However, an agreement to reduce them to zero in short order was welcomed with some fanfare at the time by the government and the industry in July.

At the time the 25% tariff was first imposed, steel executives described the move as “devastating”.

However, industry sources told the BBC today that while the news was disappointing, the UK still enjoyed a comparative advantage over other producers who face 50%.

One added that it at least gave the industry some certainty in a world where a surplus of cheap steel was causing many countries to erect trade barriers to protect their domestic industry. Gareth Stace from UK Steel said the UK should do the same.

“It is even more imperative now that the UK Government beefs up its own trade defences to ensure UK steelmakers have a sustainable share of their own market. In these market conditions, the last country to protect their industry will be the first to lose it,” he said.

Hopes of a hasty deal to remove tariffs completely hit snags as US officials raised questions about the exports from the UKL’s largest steel maker Tata, which has shut down its blast furnaces – meaning that steel is not made from scratch in the UK – pending the completion of new Electric Arc furnaces due to be completed in 2027.

The steel industry in the UK is in considerable financial distress, which has seen the government take over running Chinese-owned plants in Scunthorpe while Liberty Steel plants in Rotherham and Stocksbridge collapsed into government control last month.