The United States is poised to reintroduce sweeping tariffs on steel imports, a move that has sent ripples of concern through the UK steel industry. Recent statements from Washington indicate that all foreign steel could soon face hefty duties entering the US market. For the UK – a close ally and significant steel exporter to America – these potential tariffs raise urgent questions. How will UK steelmakers cope with new trade barriers? What might the economic fallout be, and how could the UK government respond?
This article explores the latest developments in US trade policy on steel, analyses the prospective impact on Britain’s steel sector, and examines reactions from officials, industry leaders, and experts.
US Trade Policy Developments: Steel Tariffs Return
In early February 2025, the US administration announced plans to impose a 25% ad valorem tariff on all steel imports, alongside new tariffs on aluminum
. This policy marks a return to the protectionist measures last seen during Donald Trump’s first term, when 25% steel and 10% aluminum tariffs were levied globally under Section 232 of the Trade Expansion Act, ostensibly on national security grounds
. According to the White House proclamation, the upcoming tariffs will take effect on 12 March 2025 and eliminate previous quota arrangements and country exemptions that had been negotiated in recent years.
US officials justify the move by citing persistent problems of global excess capacity and trade circumvention. The proclamation points to a projected 630 million tonne surplus in world steel capacity by 2026 and alleges that some countries have failed to curb Chinese steel transshipments, undermining earlier quota deals.
In effect, the US is reverting to an across-the-board tariff regime for steel imports – a significant escalation in trade policy.
US President Donald Trump framed these tariffs as necessary to protect domestic metal producers, arguing that prior agreements (with allies like the EU, UK, Japan, and others) were ineffective. He highlighted that steel imports from allies climbed from 18.6% of total U.S. imports in 2020 to 20.7% in 2024, suggesting that quota systems did not sufficiently restrain foreign inflows.
In other words, British steelmakers have yet to regain their pre-tariff foothold in the US market, even under the quota regime.
The proposed tariff rate is 25% on steel (with aluminum tariffs expected to be enforced as well, possibly at a similar rate). Implementation is imminent: imports arriving after the March 12 deadline will incur the duty.
At this stage, US authorities have published details for steel but not fully clarified the aluminum measures
US Trade Policy Developments: Steel Tariffs Return
For the UK’s steel sector, America’s tariff decision poses a serious threat. The United States is Britain’s second-largest export market for steel (after the EU), accounting for roughly £400 million of UK steel exports annually.
If a 25% import tax is reimposed, those exports could contract further, as UK steel would become significantly more expensive for American buyers. Industry group UK Steel has warned that new US tariffs would be “a devastating blow” to UK producers.
Exports and Revenue: A steep tariff will likely make UK steel products far less competitive in the US, forcing many American importers to seek domestic or non-UK suppliers to avoid the duty. Key UK-made products – from specialty steel sections to high-quality engineering steels – could lose market share. The result would be reduced sales volumes and revenue for British mills. UK Steel’s Director General Gareth Stace cautions that this move “will hinder UK exports to the US” and remove a key outlet for British steel.
Supply Chain and Industrial Effects: The tariff shock may reverberate through supply chains. Some UK steel exports feed into US manufacturing and defense supply chains – for example, high-grade steels used in aerospace or defence equipment, which the UK government has noted are important to U.S. industries.
Pricing and Competition: The UK steel market is already under pressure from imports, and a new U.S. barrier may intensify that pressure. Currently, about 70% of the steel used in the UK is imported, a share that has jumped from 55% in 2022 to 70% in 2024 amid weak domestic demand
Countries like India, Vietnam, China, South Korea, and Turkey have been aggressively selling steel into the UK.
If the US market closes itself off, many overseas producers (including EU mills that lose their U.S. quota access) will seek alternative buyers, potentially redirecting steel exports towards the UK and other open markets.
The risk is a surge of low-priced imports that UK manufacturers must compete against at home. To match these prices and retain customers, British steel firms could be forced to discount their products further, eroding profitability.
Dr. David Crosthwaite, chief economist at BCIS, notes that while buyers may enjoy cheaper steel for a time, “this situation is only sustainable if UK producers can withstand the intensified competition.” In a weak global market, UK mills might have to accept lower prices both domestically and abroad, just to keep their order books filled.
Such pricing pressure can have broader economic consequences. Should UK steelmakers reduce output or jobs to cope with falling revenue, the effects will be felt in steel towns from South Wales to Yorkshire. Plant slowdowns or closures would mean job losses, reduced industrial output, and knock-on impacts on local economies. Mr. Stace has warned of “hugely distortive effects on international trade flows, adding further import pressure to our own market”
In the worst case, a prolonged surge of imports and constrained exports could shrink Britain’s domestic steel capacity, making the nation even more import-dependent for a critical material. Over time, a diminished UK steel sector could lead to higher prices or supply vulnerabilities if global conditions change (for instance, if another country’s export policy shifts or a geopolitical event constrains supply).
UK Government’s Response: Negotiation, Safeguards, and Support
Faced with these threats, the UK government is weighing its options. Officials in London have so far struck a cautious but determined tone. The priority is to avert the tariffs or mitigate their impact through diplomacy rather than mirror-imaging the US move with immediate retaliation. Business and Trade Secretary Jonathan Reynolds noted that Britain would seek to persuade Washington to exempt UK steel and aluminium from the tariffs, given the “sensitive role” UK metal plays in U.S. defence and manufacturing supply chains.
There is a window of opportunity – the tariffs are not due to kick in until mid-March – and UK leaders aim to use this time for intensive dialogue. According to Trade Minister Douglas Alexander, London is “engaging in a constructive and mature dialogue” with counterparts in Washington to find a solution before the deadline.
The UK’s ambassador in the US and diplomatic channels are actively working to make Britain’s case behind the scenes.
Possible UK Actions (short and long term) include:
Negotiating Tariff Exemptions or Quotas: The government is pressing for either a reinstatement of the tariff-rate quota deal or a new exemption for UK metals. British officials point out that UK steel poses no threat to US national security and that American firms actually rely on certain UK steel products.
Trump himself hinted earlier this February that “something could be worked out” with Britain on tariffs, suggesting room for a diplomatic fix. London will likely leverage the strong UK-US strategic alliance in talks, emphasizing cooperation on issues like global overcapacity (particularly addressing China’s role) as a path forward instead of punishing tariffs.
Maintaining Safeguards Against Import Surges: To protect the home market from a flood of diverted steel, the UK has its own steel import safeguards in place – a system of quotas and 25% tariffs on imports beyond those quotas (inherited from similar EU measures). Government ministers have confirmed that the UK’s steel safeguards will remain in force until at least June 2026.
This policy is meant to prevent exactly the kind of import glut that a new US tariff might spark. If needed, the UK could adjust these safeguards (for example, tightening quota volumes or extending their duration) to shield domestic producers from unfair competition. British steelmakers and unions are already urging such steps; Community, the steelworkers’ union, stressed the “even greater need for comprehensive safeguards to protect our domestic steel” in light of the US move.
Retaliatory Tariffs on US Goods: While not the preferred first response, the UK has the option to impose tit-for-tat tariffs on selected US exports if diplomacy fails. This was the playbook in 2018, when the EU (with the UK as a member) retaliated against Trump’s original steel duties by targeting iconic American products (e.g. bourbon whiskey, motorcycles) with import taxes.
The European Union is already signalling it will protect its interests and respond in kind if the US goes ahead.The government appears to be holding fire on retaliation for now, to give negotiations a chance and avoid harming the broader £300 billion UK-US trade relationship.
If the tariffs do hit, though, political pressure may mount for the UK to respond in some form to show support for the steel sector.
Britain, now outside the EU, would need to decide on its own measures. However, UK officials sound reluctant to escalate quickly. “What British industry needs and deserves is not a knee-jerk reaction but a cool and clear-headed sense of the national interest,” Minister Alexander told Parliament
Financial Support and Industrial Strategy: Alongside trade talks, the UK is accelerating efforts to bolster its steel industry at home. The Department for Business and Trade has fast-tracked a “Plan for Steel” consultation, publishing it weeks earlier than scheduled as a response to the US announcement.
This plan will examine structural challenges facing UK steel (such as high energy costs and global unfair trading practices) and plot a course for long-term competitiveness
The current government (elected in late 2024) has pledged £2.5 billion of investment in the steel sector, with a comprehensive steel strategy to be released in Spring 2025.
That strategy is expected to include measures for transitioning to low-carbon “green steel” production, improving domestic demand for UK steel (for example, through infrastructure projects and procurement policies), and possibly direct aid for beleaguered steelmakers. By bringing forward the consultation and convening a new Steel Council, ministers are signalling that “the UK steel industry has a long-term future under this government”
In the immediate term, Business Secretary Jonathan Reynolds and the Industry Minister have been in close contact with steel companies and unions since the tariff news broke, discussing contingency plans and support to tide the industry through the uncertainty.
Together, these responses form a mix of diplomacy and defence – try to head off the US tariffs through negotiation, while shoring up the domestic industry against potential fallout. It’s a delicate balance: London aims to show it stands by UK steelworkers (through safeguards and investment) without blowing up relations with its closest ally. Officials have made clear that they “stand ready to work with President Trump to find solutions that work for both the UK and the US”.
All eyes are now on the ongoing talks and whether a compromise can be reached before the March deadline.
