The airport will build new terminal buildings, aircraft stands and passenger infrastructure and has signed a charter that commits to using UK-made steel for its construction projects where possible.
Heathrow also announced new work towards a third runway, in a boost for the Chancellor Rachel Reeves who made her support for the controversial and much-delayed project a centrepiece of her crucial growth speech in January.
Industry Minister Sarah Jones is expected to say at a launch event at Heathrow on Wednesday: “This investment is the latest in a long line of wins which our Plan for Change has helped deliver, and not only secures thousands of jobs but marks a major vote of confidence in our homegrown steel sector and this government’s Industrial Strategy.
Alex Veitch, director of policy at the British Chambers of Commerce, said the announcement would support “domestic steel production and supply chains across the UK”.
It is likely to be welcomed by the steel industry, which used a meeting with Jones on Tuesday to raise deep concerns about Trump’s proposed tariffs.
Tit-for-tat tariffs not ruled out
Whitehall sources have indicated the Government will not react to Trump’s tariffs until full details emerge, including on aluminum, given that there is still uncertainty over whether the President will introduce levies of 10 per cent or 25 per cent on the metal.
Trade Minister Douglas Alexander has suggested the UK does not want to fall into a trap of making concessions, due to the uncertainty created by Trump over the tariffs.
He told the Commons: “The new President has a speciality in generating uncertainty. It’s part of his style of negotiations to create uncertainty as to what will happen next.
“We need to take a considered view of what is emerging and still emerging in relation to aluminium”.
Alexander went on: “What British industry needs and deserves is not a knee-jerk reaction, but a cool and clearheaded sense of the UK’s national interest based on a full assessment of all the implications of the US actions.”
He added that the UK had a “strong and balanced trade relationship” with the US.
“We stand ready to work with President Trump to find solutions that work for both the United Kingdom and the United States,” he added.
While the Government is leaning away from hitting the US with retaliatory tariffs, it is still not ruling them out.
Alexander also declined to say whether the Government could swerve US tariffs on British steel by throwing the Chagos deal “in the dustbin”.
Sir Julian Lewis, the MP for New Forest East, asked: “If President Trump offered to cancel the tariff on steel imports in return for the UK throwing in the dustbin the appalling Chagos giveaway deal, would the Government agree?”
The minister replied: “Tempting though it is to indulge in the hypothetical negotiating strategy as ventriloquised through [Lewis], I think consistent with the approach that we need to take a considered view of what is emerging and still emerging in relation to aluminium, I think the responsible case is to say we should leave those in the good offices of the UK ambassador to the United States (Lord Mandelson) and the Foreign Secretary (David Lammy).”
The industry called on ministers to develop safeguards against dumping because the UK’s carbon border tax, which will raise the price of steel produced more cheaply by polluting countries, will not come into effect until 2027.
Supreme power has eroded whatever judgement Trump once had
Read MoreExperts from the National Institute of Economic and Social Research said the tariffs would have a limited direct impact on the British steel industry but broader economic turbulence would hit the UK. However, they advised the Government not to hit back with levies on American steel which would raise prices for British businesses.
Stephen Millard added: “Big question, though, should we retaliate? My answer would be no. Why not? Because steel is an important input into production, you’re kind of almost kicking yourself by making imports of steel more expensive.”
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