The UK reaffirmed its commitment to US trade talks as British exports were swept up in President Donald Trump’s global steel and aluminium tariffs, breaking with the European Union and its decision to retaliate immediately.
Business and Trade Secretary Jonathan Reynolds called the US decision to impose 25 percent levies on foreign metal products without exemptions on Wednesday morning “disappointing.” Nevertheless, junior Treasury minister James Murray told Times Radio the UK wouldn’t retaliate immediately while reserving the right to do so in due course.
The US move is a blow to Prime Minister Keir Starmer, whose visit to the White House last month appeared to put the UK on a good footing, with officials holding out hope that the talks for a “new economic deal” touted by Trump and the premier would spare the country from the initial salvo of tariffs. Britain had been making the case for an exemption by pointing out that its trade in goods with the US is broadly balanced, and that UK steel and aluminium is a small fraction of that imported by the US.
Reynolds held a call with US Commerce Secretary Howard Lutnick on Sunday, in which the tariffs were discussed. Starmer also urged Trump not to target British manufacturers in a call with the president on Monday.
“We are focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy,” Reynolds said on Wednesday in a statement.
The British response set up a split with the continent, as the European Commission launched what it called “swift and proportionate countermeasures.” While that underscores the extra flexibility afforded to the UK by its formal exit from the bloc since the last Trump-led trade war, it complicates Starmer’s efforts to rebuild economic and security ties with European allies.
The measures are another drag on the UK’s £2.3 billion ($3 billion)-a-year steel industry, which has been buffeted by high domestic energy costs, decarbonisation goals and an oversupplied global industry. The domestic industry’s output has declined by more than 60 percent since 1990, according to Parliamentary data.
The tariffs could be “another nail in the coffin” for the industry, with British steel manufacturers already seeing US customers cancel and pause orders in the last few days, Director General of UK Steel Gareth Stace told Times Radio on Wednesday. The government should follow the EU’s lead in raising trade barriers to prevent the steel that’s “floating around the world that would have gone into the US market” from entering the UK, he said.
“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,” Stace said in a separate statement. He urged the government to continue to negotiate exemptions with the US.
Some 7 percent of British steel exports went to the US in 2024, worth £370 million, according to UK Steel.
Steel exports to the US are a “very small” part of the UK’s £395 billion goods exports, Derek Halpenny, a head of research at MUFG, said, although tariffs “would still have a greater specific impact on the UK steel industry.”
“The UK government is probably more focused on the optics of a carve-out rather than the specific economic impact from these tariffs on the UK economy,” he said.
–With assistance from Greg Ritchie, Julian Harris and Jack Ryan.
By Lucy White and Ailbhe Rea
Learn more:
Trump Stirs Tariff Pot With Fresh Threats on EU and a Feb 1 Deadline for China
US President Donald Trump has vowed to hit the European Union with tariffs and said his administration was discussing a 10 percent punitive duty on Chinese imports because fentanyl is being sent from China to the US.
