Donald Trump plans to increase tariffs on imported steel and aluminium to 50 per cent from 25 per cent, ratcheting up pressure on global steel producers and deepening his trade war.
“We are going to be imposing a 25 per cent increase. We’re going to bring it from 25 per cent to 50 per cent – the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” he said at a rally in Pennsylvania on Friday.
The US President announced the higher tariffs just outside Pittsburgh, where he was talking up an agreement between Nippon Steel and US Steel. He said the $14.9bn deal, like the tariff increase, will help keep jobs for steel workers in the US.
Donald Trump said the higher tariffs will help keep jobs for steel workers in the US (Photo: Jeff Swensen/Getty)He later posted on social media that it was a “great honour” to increase the tariffs on steel and aluminium and that they would take effect on Wednesday.
He added: “Our steel and aluminum [sic] industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!”
In 2024, the UK exported 180,000 tonnes of semi-finished and finished steel to the US, worth £370m, some 7 per cent of the UK’s total steel exports by volume and 9 per cent by value, according to trade body UK Steel.
The aluminium industry said the US market accounts for 10 per cent of exports – valued at £225m.
When Trump first announced 25 per cent tariffs on steel and aluminium in April, the British steel industry warned that jobs could be at risk.
But, Keir Starmer said jobs would be saved by a UK-US trade deal agreed in May that slashed tariffs of 25 per cent on steel and aluminium reduced to zero.
At the time, the Prime Minister said the historic deal delivers for British business and workers protecting thousands of British jobs in key sectors including steel.
“This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement,” Starmer said.
The UK has just one remaining steel plant, British Steel’s Scunthorpe factory, which the Government used emergency legislation to to keep furnaces running.
UK steel firms fear cancelled orders
It is not yet clear how the doubling of tariffs, set to come into force on 4 June, will impact the UK.
Although the UK and US have agreed a trade deal, this is yet to come into effect.
It means businesses exporting goods to the US are currently being impacted as the original 25 per cent import tax remains in effect while government officials work to implement the deal.
The text of the agreement stated that tariffs will only be lowered if US requirements are met on the “security of supply chains” and the “nature of ownership of the relevant production facilities”.
UK Steel Director-General, Gareth Stace, said the doubling of tariffs plunges the UK steel industry further into confusion.
The UK steel industry has been plunged into confusion by Trump’s tariffs announcements, UK Steel said (Photo: Danny Lawson/WPA Pool/Getty Images)“The announcement that US steel tariffs could jump up to 50 per cent on Wednesday is yet another body blow for all UK steelmakers in this torrid time. UK steel companies are this morning fearful that orders will now be cancelled, some of which are likely being shipped across the Atlantic as we speak,” Mr Stace said.
The US is the UK’s second most important export market, which means it is critical that this new steel tariff does not apply to UK steel imports to the US, UK Steel said.
“Uncertainty remains as to whether and when our second biggest export market will be open for business or is being firmly shut in our faces,” Mr Stace said.
What impact are the tariffs having on UK growth?
A rate-setter at the Bank of England has said the recent uptick in inflation is largely caused by one-off factors, highlighting the drag on economic growth due to Trump’s global tariffs.
Alan Taylor, who was appointed to the Bank’s Monetary Policy Committee last year, told the Financial Times: “I’m seeing more risk piling up on the downside scenario because of global developments,” he said, adding that the impact of Trump’s tariffs on imports would “be building up over the rest of this year in terms of trade diversion and drag on growth”.
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