Reynolds: Trump’s Steel Tariffs Weaken Both UK and US Economies
Business Secretary Jonathan Reynolds emphasized the need for job guarantees and profitability within the steel sector, expressing his concern that imposing US tariffs on British steel would have negative consequences for both nations.
Reynolds told BBC Radio 4’s Sunday with Laura Kuenssberg program that he believes there is a mutual interest between the UK and US in negotiating an exemption from President Donald Trump’s planned 25% import tax, which could come into effect in March. He argued that the UK offers specialized steel products crucial to the United States’ needs, such as submarine casings made in Sheffield.
Reynolds also highlighted that imposing tariffs would increase costs for US taxpayers and hinder trade between both countries. His comments came after the government promised up to £2.5 billion in support for the UK’s struggling steel industry.
The business secretary noted that while President Trump has said his tariffs will be enforced without exemptions, he has had constructive conversations with key figures in the Trump administration regarding their unique relationship and shared interest.
However, Reynolds acknowledged that achieving a deal would not be easy. He explained that although the UK-EU and US-China trade relationships are different from those within Europe or Asia, it is essential to tell our “different story” when engaging with these nations on trading matters.
The government has already stated its intention not to retaliate immediately against Trump’s tariffs. Yet, there are concerns within the steel industry that such tariffs could have detrimental effects beyond just hindering exports to the US.
Andrew Griffiths, shadow business secretary, criticized the government for remaining silent on the uncertainty faced by Britain’s steel sector and highlighted their closest trading partner as a better candidate for dialogue over tariff exemptions. The UK is not a significant supplier of steel to the US, but fears persist that cheaper imports from other countries could flood domestic markets.
The consultation launched by the government aims to reverse long-term issues facing the industry by identifying opportunities for expansion and encouraging greater use of locally-made steel in public infrastructure projects. It also seeks improvements in scrap processing facilities and investments in electric arc furnaces, which are more energy-efficient than traditional blast furnaces.
Furthermore, plans include exploring ways to reduce electricity costs for steel companies but with no commitment yet from the government to lower energy bills. The support package through the National Wealth Fund is expected to benefit various regions known for their historical steel production.
The GMB union praised the “desperately needed” funding aimed at supporting what it called a beleaguered sector, while UK Steel welcomed the government’s commitment as both vital and welcome. Information gathered from this consultation will inform a comprehensive strategy expected to launch in spring.
Despite these efforts, some politicians believe that more measures are necessary to prepare for potential retaliatory tariffs, with Liberal Democrat deputy leader Daisy Cooper warning of the “dangerous exposure” left by President Trump’s policies toward UK steel.
In summary, as discussions continue between UK and US authorities over tariff exemptions, stakeholders across the industry are closely monitoring how these developments could impact jobs and profitability in Britain’s vital manufacturing sector.
