UK steel exporters have avoided a tariff hike — for now. US President Donald Trump recently signed an executive order doubling tariffs on imported steel and aluminium from 25% to 50%. However, the UK received a temporary exemption. The 25% tariff will still apply to UK steel, instead of the new 50% rate, due to a pending trade agreement.
Trade Deal Still Not in Effect
The exemption is linked to the UK-US Economic Prosperity Deal (EPD), signed on 8 May 2025. While the deal promises to reduce or remove tariffs, it hasn’t been implemented yet. As a result, British exporters still face the 25% charge. If the deal collapses or isn’t fully enforced, the US could increase tariffs on UK steel starting 9 July 2025.
Trump’s order states that the UK deserves “different treatment” due to the EPD. Yet, he also warned the US would reassess if the UK fails to meet its commitments under the deal.
Government Responds to Tariff Threat
The UK government said it remains “committed to protecting British business and jobs.” A spokesperson added, “We will continue to work with the US to implement our agreement, which will see the [tariffs] removed.” The government plans to present legislation in Parliament soon. However, the Conservative Party called the order a “fresh tariff blow” and criticized the current uncertainty.
Timeline of Key Events
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10 Feb: Trump announced a 25% tariff on all imported steel and aluminium.
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12 Mar: The tariffs took effect.
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2 Apr: Trump imposed a 10% baseline tariff on all goods from several countries, including the UK.
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8 May: UK and US agreed to reduce or remove certain levies.
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4 June: Trump doubled tariffs for most countries, but left the UK’s rate at 25% — for now.
UK Steel Industry Faces Uncertainty
The US is one of the world’s largest steel importers, following the EU. It gets most of its steel from Canada, Brazil, Mexico, and South Korea. For the UK, about 7% of steel exports go to the US, making the American market crucial.
Gareth Stace, Director-General of UK Steel, welcomed the UK’s exemption, calling it “a welcome pause.” But he warned, “Uncertainty remains over timings and final tariff rates, and now US customers will be dubious over whether they should even risk making UK orders.”
He added, “The US and UK must urgently turn the May deal into reality to remove the tariffs completely.”
Business Leaders Express Concern
Rowan Crozier, CEO of Birmingham-based Brandauer, said the carve-out gave UK firms a short-term edge over global competitors. Still, he noted the uncertainty was more damaging. “That’s one thing that the Trump administration continues to do — create confusion, with the hope of getting a deal,” he told the BBC. “Essentially, our customers are less confident in forward planning, or ordering what they need.”
Crozier also mentioned that US buyers currently have little choice but to continue paying the tariffs.
Experts Say Tariff Confusion Hurts Investment
Alan Auerbach, a tax policy expert at the University of California, said that more US steel production won’t happen right away. “In the short run, buyers are simply going to have to pay more for the steel that they’re buying from foreign sources,” he explained.
He added that uncertainty around future tariffs “undercuts the aim of getting more US production” because companies need clear policy direction before they invest.
Labour Under Fire for Trade Handling
Shadow Business Secretary Andrew Griffith blamed Labour for the confusion. He said, “Labour’s botched negotiations have left businesses in limbo and this country simply cannot afford their continuing failure.”
