How uk steel industry is navigating us tariffs

The UK steel industry faces significant challenges as President Trump’s latest tariffs tighten their grip on global trade. The new measures impose a 25 per cent levy on aluminium products and extend beyond raw materials to include goods partly made with steel or aluminium. British companies exporting to the United States are now grappling with an increasingly protectionist landscape.

Unlike Trump’s first term, where exemptions allowed for some breathing room, these latest tariffs involve no exceptions. The UK, which exported 180,000 tonnes of semi-finished and finished steel to the United States in 2024—valued at £370 million—will feel the sting of these new restrictions, potentially exacerbating a fragile market already suffering from subdued domestic demand. Steel dominates UK exports to the United States, with nine per cent of British steel exports by value dedicated to this critical market.

Domestic manufacturers are already seeing ripple effects. Significant players such as Marcegaglia Stainless Sheffield export large volumes of semi-finished steel to South Carolina for processing. The company will now face the full brunt of the 25 per cent tariff, raising costs for operations reliant on UK supplies. Small businesses, too, are feeling the strain. London-based Kaymet, which exports aluminium products, anticipates sharp declines in US orders as customers resist higher prices.

High energy costs and labour expenses continue to push the UK steel industry to the brink. On top of these structural challenges, global supply chains must now divert products initially destined for the American market to other regions. This shift raises concerns over an oversaturated European market as countries like China and India re-route their surplus stockpiles. While lower production costs in these nations once came with compromises in quality, this is no longer the case, leaving British steel even more vulnerable to competition.

Industry leaders and trade bodies are urging the UK government to intensify trade-defensive measures to curb the influx of cheaper imports. Already, the EU is bolstering its safeguard systems as its Steel and Basic Metals Action Plan approaches implementation. UK Steel, the organisation representing domestic producers, argues that similar action is essential for Britain to shield itself from global supply swings.

The tariffs strike at a sensitive moment for the broader transatlantic trade relationship. British companies supplying to major industries such as aerospace and automotive have signalled potential cost rises for end consumers, which could erode competitiveness. Some global manufacturers dependent on UK inputs, such as Airbus and Boeing, find it near impossible to switch suppliers due to strict approval policies. This dynamic partially shields British firms but does not fully alleviate the tariff burden.

The steel levies will continue deepening cracks in the UK’s industrial base unless meaningful action is pursued. A delicate balance of securing exemptions and safeguarding measures will be critical to maintaining international trade pipelines and protecting jobs at home.