The UK-based trade association UK Steel has stated that the US’ 25 percent tariffs on steel and steel derivative products that came into effect yesterday will have hugely damaging consequences for UK suppliers and their customers in the US especially in highly challenging market conditions including global overcapacity and oversupply, high energy costs, and weak demand. They will also have a further harmful indirect effect of deflecting steel trade from the US into markets like the UK.
The US is the UK’s second most important export market for steel after the EU, accounting for nine percent of the UK’s steel exports by value and seven percent by volume - mostly special steel that goes into crucial sectors such as defense, oil and gas, construction equipment and packaging.
The UK’s steel safeguard quota volumes have increased by 22 percent compared to when first introduced in 2018, while UK demand has decreased by 16 percent. Therefore, UK Steel warned that these quotas are oversized and do not offer adequate protection from the large-scale trade diversion that is likely to take place. As the UK’s safeguard measures will expire in June 2026, the associated stated that it is essential that existing measures are tightened, as the EU is doing with its own measures, and that concrete plans are put in place for the replacement of safeguards, ideally well before their expiry.
“These tariffs couldn’t come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape. What’s more, the EU will also be taking trade restrictive action soon that will amplify the impact of US tariffs. It is essential that the UK government not only continues efforts to negotiate exemptions with the US, but also takes decisive action to bolster our trade defenses,” Gareth Stace, UK Steel director general, said.