US Steel Tariffs Removed

Following the controversial taxes imposed by former President Donald Trump back in 2018, the US has now agreed to eradicate the tariffs on all UK Steel and Aluminium shipments.

The Steel Tariff

Back in 2018, during his presidency, Donald Trump and his administration imposed numerous tariffs on various countries, including the UK. The US government enforced the taxes in the name of national security, with Trump believing cheap foreign metal imports were a significant threat to the US markets.

Trump was keen to use such tariffs as bargaining chips in his diplomacy. However, it later backfired when he announced the 25% tax on foreign Steel shipments as well as a 15% tax on foreign Aluminium and received immense criticism.

Trump later supported his decision and rejected the mass concerns regarding the subsequent price increases, stating tariffs do not raise prices. Instead, he described the need to preserve America’s manufacturing base, and the taxes were implemented.

Impact on the Steel Industry

The Steel and Aluminium sectors are vital for our economy, supporting the jobs of over 80,000 people in the UK. So, how did this affect the Steel industry here in the UK?

According to Gareth Stace, director-general of UK Steel, exports of UK Steel to the US have been cut in half since Trump first enforced the tariffs back in 2018. This then resulted in a large number of job cuts for steelworkers across the UK.

Removing the Tariff on Steel

Following earlier deals made with the European Union and Japan, the US have now agreed to replace the current 25% tariff on Steel with a quota system.

The deal will be in effect from 1 June 2022, with the agreed policy letting UK Steel and Aluminium imports into the country duty-free. The quota allows for this to occur up to a certain level until the taxes are implemented again.

As you can imagine, steel superstore, UK manufacturers and workers are thrilled by the news. UK Steel commented that the recent deal to remove the tariffs would be “felt by steel companies and their employees right across the UK and is immensely welcome”.

A spokesperson from Sheffield Gauge Plate shared their delight in the deal, saying, “the new deal with the US is extremely significant for us as an independent Steel supplier”.

“Trump’s tariffs had an extremely detrimental effect on our business; we’ve produced Steel and shipped it worldwide from our Sheffield site for over 40 years.”

“The quota deal means we can continue to do so for years to come, supporting our families and the surrounding community.”

The previous tariffs meant prices of Steel bars and sheets increased, and so customers began to shop elsewhere. Rather than buying from UK suppliers, customers shopped from suppliers based in countries still in the EU that didn’t have such tariffs imposed on them. This then had a knock-on effect on our economy and resulted in job losses.

The new deal is seen as somewhat of a turning point between the US and the UK, an attempt to resolve the subsequently strained relationship between the two countries.

Following the new deal, the UK also announced it would be suspending the retaliatory tariffs put in place following the events of 2018. According to US officials, placing such tariffs on US products, like the classic Harley Davidson motorbikes, resulted in a loss of over $500 million in annual trade.

The United States Trade Ambassador, Katherine Tai, stated, “the historical deal announced today delivers on President Biden’s vision to repair relationships with our allies while also helping to ensure the long-term viability of our steel and aluminium industries”.

Last year alone, the US and UK traded over $260 billion in exports, including machine parts, oil and gas, with American imports accounting for almost one-fifth of all total UK trade. And now, with the eradication of the tariffs, this number will continue to grow and boost our economy.

Anne-Marie Trevelyan, the Secretary of State for International Trade of the United Kingdom, described the new agreement as “good news for the Steel and Aluminium sectors and their workers”.

This deal is just one of the steps towards rebuilding and restrengthening our prosperous and historic trading relationship with the US.