The 25% tariffs imposed by President Trump on steel and steel derivatives, which affect all trading partners including the UK, have now taken effect. This move is expected to cause significant disruption for UK steel suppliers and their customers in the United States. Additionally, the tariffs will likely push steel trade away from the US, directing it towards other markets, such as the UK. Further reciprocal tariffs from the US are anticipated on April 2.
The United States is the UK’s second-largest steel export market, after the European Union. Steel exports to the US account for 9% of the UK’s total steel exports, with 7% by volume. These exports primarily involve specialized steels used in industries like defense, oil and gas, construction, and packaging. The impact of these tariffs is further magnified by challenging market conditions, including global oversupply, high energy costs, and weak demand.
Trade Protection Issues
Despite the UK’s partial protection through a steel safeguard quota, the situation remains precarious. This quota, which has been relaxed every year since 2018, is now 22% larger than initially intended. However, UK steel demand has decreased by 16%, and the oversized quotas do not provide enough protection against the potential trade diversion caused by US tariffs.
British Steel is urging the UK government to tighten trade defenses and develop specific plans for replacing current measures, particularly as the steel safeguards will expire in June 2026. Meanwhile, the EU is pushing forward with a steel and metals action plan, which will further increase pressure on the UK’s direct exports and trade defense efforts.
Gareth Stace, Managing Director of British Steel, expressed disappointment over the tariffs, emphasizing that the UK is a partner to the US, not a threat. He called on President Trump to recognize the UK’s role as a valued ally, sharing the same goals in addressing global trade issues like oversupply and unfair competition.
“These tariffs are a setback for the UK steel industry, which is already grappling with high energy costs, low domestic demand, and an oversupplied global market,” Stace said. “The EU’s trade restrictions will only add to the challenges posed by US tariffs. The UK government must continue to negotiate exemptions and strengthen trade defenses to protect the sector.”
Uncertainty for UK Aluminium Industry
Bridgnorth Aluminium, the UK’s only fully integrated aluminium coil rolling mill, faces uncertainty due to the new tariffs. The company, which employs 330 people in Shropshire, exports 20% of its production to the US. The new tariffs could make the business less competitive, particularly if the 25% rate remains unchanged.
Adrian Musgrave, Head of Sales at Bridgnorth Aluminium, explained that the tariffs add to the existing global uncertainties the company is already facing. He noted that the cost of aluminium could rise, especially since many US manufacturers currently rely on UK suppliers for materials.
Musgrave called for an agreement between the UK and US to remove or significantly reduce the 25% tariff. He thanked the UK government and manufacturing organizations, like the Aluminium Federation (ALFED) and Make UK, for their efforts to lobby on behalf of the sector.
Impact on UK High-Tech Manufacturing
The tariffs will also have a significant impact on high-tech industries in the UK, especially aerospace and automotive manufacturing. Jamie White, Managing Director of Exactaform, warned that the tariffs on aluminium and steel would affect the production of precision components critical to these sectors.
“Aerospace manufacturers already face complex global supply chains, and any additional cost pressures could harm their competitiveness and lead times,” White said. “For the automotive industry, the increased cost of aluminium will make weight reduction and manufacturing more difficult.”
White concluded by highlighting the ripple effects the tariffs could have across the supply chain, impacting machining strategies, tooling decisions, and overall production efficiency in both the aerospace and automotive industries.
As the US tariffs take effect, UK manufacturers continue to call for action from their government to mitigate the impact and ensure the sector remains competitive on the global stage.
