UK ‘disappointed’ as Donald Trump metal tariffs kick in

The UK has called the introduction of US President Donald Trump’s tariffs on imports of steel and aluminium “disappointing” as the 25% levy kicks in.

Trade Secretary Jonathan Reynolds said the UK is taking a “pragmatic” approach, but the Conservatives said Labour has “no plan” as steelmakers raised concerns about cheap steel being redirected to the UK because of the US tariffs.

In contrast to the UK, the EU said on Wednesday it will impose counter tariffs on €26bn (£22bn) of US goods.

Trump hopes the tariffs will boost US steel and aluminium production, but critics say it will raise prices for US consumers and dent economic growth.

US markets sank on Monday and Tuesday as traders and analysts expressed recession fears.

The tariffs introduced on Wednesday mean US businesses wanting to bring steel and aluminium into the country will have to pay a 25% tax on them.

These costs will probably be passed on to US consumers.

European Union President Ursula von der Leyen said tariffs “bring uncertainty for the economy. Jobs are at stake, prices up, nobody needs that, on both sides, neither in the EU or the US.”

She said the EU’s retaliatory tariffs were “strong but proportionate” and that the EU remains “open to negotiations”.

The EU tariffs will be imposed on “products ranging from boats to bourbon to motorbikes” the EU said. They will be partially introduced on 1 April and fully in place on 13 April.

Gareth Stace, director general at industry body UK Steel, said the US move was “hugely disappointing” urged for the US to work with the UK rather against it.

Some steel company contracts have already been cancelled or been put on hold, he said, adding that customers in the US will have to pay £100m per year extra in the tax.

Tariffs will “hit us hard” at a time when imports of steel into the UK are rising and the industry is “struggling” with energy prices, he said.

He said tariffs imposed by the US could mean cheap international steel flooding the UK market, putting more pressure on domestic producers.

Unite general secretary Sharon Graham called on the government to “act decisively to protect the steel industry, adding the public sector should “always buys UK produced steel”.

The Community union called for UK taxes on carbon-intensive steel, which would include metal produced in China and India.

The US accounted for about 8% of the UK’s £4.7bn of steel exports in 2023, according to the International Steel Statistics Bureau.

But for some suppliers of speciality products the US makes up a large proportion of their overall business.

Philip Jackson, the managing director of Bright Steels, a hundred-year-old family firm which employs 75 people in Malton, North Yorkshire, said tariffs may lead to customers in the US reducing their orders.

He said it won’t hit jobs but it might affect profits and the company’s ability to invest in the future.

Business Secretary Jonathan Reynolds said the tariffs were “disappointing” but the UK was “focused on a pragmatic approach” and was “rapidly negotiating” a US trade deal.

He said the UK is “working with affected companies” and will “keep all options on the table” to respond in the national interest.

But Conservative shadow business secretary Andrew Griffith said Labour “can’t even get themselves in the room” to negotiate with the US” while the Liberal Democrats said Reynolds needed to “toughen up”.

Last month the government signalled that it would seek an exemption from steel tariffs, and it’s understood levies were discussed during a phone call between Prime Minister Sir Keir Starmer and Trump on Monday.

However, in the US, some welcomed the tariffs, with the American Iron and Steel Institute (AISI) lobby group saying they will create jobs and boost US steel manufacturing.

Its president Kevin Dempsey said the move closed a system of exemptions, exclusions and quotas that allowed foreign producers to avoid tariffs.

In 2018, during his first term as president, Trump imposed import tariffs of 25% on steel and 10% on aluminium, but carve-outs were eventually negotiated for many countries.

This time the Trump administration said there will be no exemptions.

The US is a major importer of aluminium and steel, and Canada, Mexico and Brazil are among its largest suppliers.

On Tuesday, Trump u-turned on doubling the tariffs on Canada specifically in response to a surcharge Ontario had placed on electricity.

Others in the US do not support the tariffs.

Michael DiMarino runs Linda Tool, a Brooklyn company that makes parts for the aerospace industry. Everything he makes involves some kind of steel, much of which comes from American mills.

“If I have higher prices, I pass them on to my customers. They have higher prices, they pass it on to the consumer,” Mr DiMarino said, adding that he supports the call for increased manufacturing in the US but warning the president’s moves could backfire.

The American Automotive Policy Council, a group that represents car giants such Ford, General Motors and Stellantis, said they “are concerned that specifically revoking exemptions for Canada and Mexico will add significant costs” to car makers’ suppliers.

Bill Reinsch, a former Commerce Department official, said the tariffs could help the US steel and aluminium industries but hurt the wider economy by making products more expensive.

Meanwhile, research firm Oxford Economics said in a report it had lowered its US growth forecast for the year from 2.4% to 2% and made even steeper adjustments to its outlook for Canada and Mexico.

Additional reporting by Michelle Fleury in New York and Ben King in London.