UK Pushes for Steel Tariff Exemption Amid US Trade Tensions

The UK government is indicating a strong intention to seek exemptions from the recently announced 25% steel tariffs imposed by the US. This move comes after US President Donald Trump’s declaration that these tariffs would take effect on March 12, without any exceptions. Business Secretary Jonathan Reynolds communicated to the BBC that the UK has a reasonable case to argue for an exemption due to its relatively small steel exports to the US, which constitute only about 10% of total British steel exports. He highlighted that UK steel is predominantly used in sectors like defense, further solidifying the case for an exemption.

Despite the pressing situation within the steel industry, the UK government has chosen to refrain from immediate retaliatory measures, differentiating itself from the EU and Canada, who plan to response aggressively to the tariffs. Concerns within the industry extend beyond direct impacts on US exports. The potential for a surge in ‘dumped’ steel in the UK market—where countries unable to export to the US might offload their steel at reduced prices—poses a risk for domestic steelmakers, making them vulnerable to undercutting.

Reynolds acknowledged the existing global oversupply of steel and aluminum but expressed the UK’s position that it should not be blamed for this issue. Additionally, he indicated the UK government would likely not join any retaliatory actions proposed by the EU, favoring the approach of free trade. The tariffs, primarily impacting importing companies, have the potential to increase prices for consumers, leading to inflation. The situation has created a sense of uncertainty within UK businesses, which will be further compounded by forthcoming tax increases set for April.

In light of these challenges, Reynolds discussed plans for regulatory changes to ease the burden on businesses, hinting at an evaluation of the current regulatory framework and the number of regulators involved. Amid these economic pressures, there remains a push for the Competition and Markets Authority (CMA) to adopt a more growth-oriented focus. As the landscape of UK commerce continues to shift due to international trade tensions, the government is navigating the complexities of maintaining competitiveness in the global market.