Reynolds: Trump’s Steel Tariffs Harm Both the UK and the U.S.

Business Secretary Jonathan Reynolds has emphasized the need for guarantees on steel jobs and profitability, asserting that imposing US tariffs on UK steel would be negative for both nations. In an interview with the BBCs Sunday programme hosted by Laura Kuenssberg, Reynolds highlighted a mutual interest in negotiating an exemption from President Donald Trump’s 25% import tax plan, which could come into force in March.

Reynolds argued that the UK is uniquely positioned due to its specialized steel exports that are crucial for the US market, such as submarine casings manufactured in Sheffield. He further noted that tariffs would increase costs for US taxpayers and weaken the relationship between the two countries. Following these remarks, the government announced support worth up to 2.5 billion for the UK steel industry.

However, President Trump has maintained a firm stance against exemptions from his tariff plans. In response to this, Reynolds stated that he had held very constructive conversations with key figures in the US administration and emphasized potential areas of constructive engagement, although acknowledging that it may not be straightforward. He highlighted differences between UK trade relationships with other countries like Europe or China.

The government has promised not to retaliate immediately against Trumps tariffs, but industry leaders such as UK Steel have warned about their devastating impact on the sector’s 400 million contribution to bilateral trade each year. While the UK is a minor supplier of steel to the US (accounting for roughly 10% of exports), there are concerns that these tariffs could lead to excess steel flooding into the market and undercutting domestic producers.

Shadow Business Secretary Andrew Griffith criticized the governments silence on uncertainties surrounding trade relations with the US. The UK has launched a consultation as part of its Plan for Steel, aiming to address long-standing issues in the industry through various measures:

• Identifying opportunities to expand steel production.
• Promoting the use of domestically made steel in public infrastructure projects.
• Improving scrap processing facilities.
• Investing in electric arc furnaces, which are more energy-efficient and environmentally friendly than blast furnaces.

The consultation also seeks to examine electricity costs for steel companies to enhance UK competitiveness globally. While the government has not yet made firm commitments on reducing energy bills, the National Wealth Fund is available to provide financial assistance through partnerships with the private sector and local authorities.

Industry leaders and unions have welcomed this support, although they emphasize additional measures such as reduced electricity costs are necessary for a sustainable revival of the steel industry. The consultations findings will be used to develop a comprehensive steel strategy expected in spring, which aims to reverse years of decline by addressing competition from imports with more favorable conditions.

The UK government has also highlighted potential domestic markets that could benefit from increased steel production, such as Heathrow Airport expansion requiring 400,000 tonnes of local steel. The GMB union and other industry representatives have praised the plan for providing desperately needed funding to a beleaguered sector.

However, political parties like the Liberal Democrats warn that more immediate preparations are required to mitigate potential retaliatory tariffs from the US.