Keir Starmer discusses UK steel tariffs in talks with Donald Trump

Keir Starmer has confirmed he will not respond with immediate counter-tariffs if former US President Donald Trump imposes a 25% levy on all steel and aluminium imports from the United Kingdom. The Prime Minister, who discussed the matter with Trump during a phone call on Monday, has prepared for the tariffs to take effect at 4am UK time on 12 March. His remarks come as Trump issued a public statement announcing a doubling of steel and aluminium tariffs on Canadian imports to 50%, a move tied to Ontario’s 25% surcharge on electricity exports to the United States.

Downing Street has reiterated the need to maintain the strong economic partnership between the UK and the US, stating that it is built on fair and reciprocal trade. The government is lobbying for an exemption from the proposed tariffs while remaining committed to protecting the critical interests of the British steel industry. A spokesperson noted, “We are prepared to defend the UK’s national interest where necessary, but we will proceed in a measured and considered manner.” As part of broader support for the industry, the UK government has pledged £2.5 billion to invest in rebuilding the steel industry and revitalising impacted communities for the future.

During Starmer’s February visit to the White House, Trump hinted at a potential “real trade deal” between the two nations that could eliminate the need for tariffs. Jonathan Reynolds, the Business and Trade Secretary, has also been in recent discussions with US Commerce Secretary Howard Lutnick to advocate for a UK exemption. Unlike many other countries, the UK does not have a significant trade surplus with the United States. To give context, only 5% of British steel exports and 6% of aluminium exports by volume go to the US.

Industry representatives and political leaders have voiced numerous warnings about the impending tariffs. Gareth Stace, Director General of the trade group UK Steel, has described the tariffs as “a sledgehammer to free trade,” citing their wide-reaching consequences on the UK steel sector and the global market. In Europe, the EU has also signalled its readiness to implement retaliatory measures against the US, with its trade commissioner, Maroš Šefčovič, engaging directly with American officials over the issue. Meanwhile, Japan’s trade minister, Yoji Muto, failed to secure an exemption for Japanese exports during his visit to Washington.

The tariffs are being justified in part by the US government on the grounds of global excess steel capacity, which is expected to reach 630 million tonnes by 2026. The executive order introducing the measure also highlighted a recent uptick in steel imports from allies like the UK, EU, and Japan, suggesting that existing quotas have failed to curb such increases. However, UK Steel has dismissed this reasoning, arguing that the reported increase is misleading due to the exceptionally low global demand for steel during the pandemic. In reality, UK steel exports to the US in 2022 were 14% lower compared to 2018 when tariffs were initially introduced.

As the deadline approaches, tensions rise, and stakeholders from all sides are leveraging diplomatic efforts to navigate this complex situation. The UK government’s measured response is being closely monitored amid fears of potential disruption to key industries and bilateral relations.