Europe retaliates against Trump tariffs - as UK steel industry warns US levies 'couldn't come at a worse time'
by Danielle de Wolfe · LBCBy Danielle de Wolfe
The UK steel industry has warned US tariffs "couldn't come at a worse time" - as Donald Trump's newly imposed levies on international imports come into effect.
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The tariffs, which see a 25% levy applied to international imports of steel and aluminium, came into effect at midnight on Tuesday (around 4am GMT), with British steel and aluminium industries bracing for the impact.
It comes as Trump insisted the chaos triggered by the tariffs is necessary to "rebuild our country".
In the last few hours, the European Union said it will impose retaliatory measures on US goods starting on April 1.
The move marks an escalating trade war triggered by the US, with a host of traditional trading partners, including the US and Canada, facing increasingly difficult restrictions on exports.
The US tariffs pose a real threat to UK steel exports - worth around £350m annually.
The UK Government is unlikely to immediately retaliate to the 25% import tax, with officials stressing the need for a "cool-headed approach", after last-ditch efforts to persuade Mr Trump to spare British industry from his global tariffs appeared to have failed.
The implementation of the levies see two rounds of tariffs placed on China, while 25% duties on some Canadian goods, as well as most Mexican cross-border trade, have been delayed until 2 April.
Gareth Stace, the director general of trade association UK Steel, branded the Trump administration's move "hugely disappointing".
He added: "President Trump must surely recognise that the UK is an ally, not a foe.
"Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.
"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. What's more, the EU is also pushing ahead with trade restrictive action that will amplify the impact of US tariffs."
Mr Stace added: "It is essential that the UK Government not only continues efforts to negotiate exemptions with the US but also takes decisive action to bolster our trade defences. We greatly appreciate all the efforts that have been made so far and will continue working closely with our Government to secure the best possible outcome."
The aluminium industry body had earlier warned the looming import taxes were already having an effect.
Nadine Bloxsome, chief executive of the Aluminium Federation, said: "The UK aluminium sector is already seeing the first impacts of these tariffs.
"The sharp rise in US premiums has created new incentives for scrap exports, raising the risk of significant domestic scrap leakage. This not only weakens the UK's recycling capacity but risks undermining our sustainability objectives and circular economy targets.
"Additionally, the uncertainty around potential trade diversion is placing considerable pressure on UK producers, especially as semi-finished goods may flood the UK market at lower costs.
"This could severely destabilise the competitiveness of UK aluminium manufacturers, who are already contending with high energy costs and complex regulatory challenges."
The issue was discussed in a call between Sir Keir Starmer and Mr Trump on Monday, and ministers and officials have been in frequent talks with their US counterparts since the measures were first proposed in February.
The Prime Minister's official spokesman said the Government was "engaging closely with the US and we remain prepared to defend the UK's national interest where it's right to do so".
He added: "The Government's committed £2.5 billion of investment to rebuild the UK steel industry and support communities now and for generations to come."
The Government estimates around 5% of UK steel exports and 6% of aluminium exports by volume go to the US, although the aluminium industry body said the US market accounted for 10% of exports - valued at £225 million.
Mr Trump has previously threatened to impose tariffs on other countries and then relented, but he remains wedded to the overall idea of making the US richer through taxing imports.
In a sign of the American leader's unpredictable approach, on the eve of the tariffs coming into force, he threatened to double the rate for Canadian metal imports from 25% to 50%, before backtracking at the last minute.
Downing Street said there were "multiple engagements at multiple levels" with the US administration as the Government attempted to spare UK exporters from the tariffs.