The United States has imposed 25% tariffs on steel and aluminium imports, reigniting global trade tensions. While the European Union and Canada have vowed to retaliate, the UK has taken a different approach, opting for negotiation over confrontation. But what does this mean for British industry, jobs, and trade competitiveness?
Steel, Tariffs, and the UK’s Dilemma
President Donald Trump’s decision to impose sweeping 25% tariffs on all imported steel and aluminium has sent shockwaves through global markets. The UK, which exports around £350 million worth of steel to the US annually, now faces the risk of being priced out of a key market. While the EU has announced counter-tariffs, and Canada is hitting back with levies on US goods, Britain is holding fire—for now.
Prime Minister Sir Keir Starmer insists the UK is pursuing a “pragmatic” approach, keeping “all options on the table.” But opposition voices argue that Britain should be standing firm alongside its European allies in challenging Trump’s trade measures.
Will This Make Steel More Expensive?
For American businesses and consumers, the tariffs are likely to drive up costs. Higher steel prices will filter through to everything from construction materials to cars and even canned drinks. The automotive industry is already warning that increased costs on components from Canada and Mexico could disrupt supply chains and lead to higher prices for consumers.
Michael DiMarino, an aerospace manufacturer in New York, summed it up:
“If I have higher prices, I pass them on to my customers. They have higher prices, they pass it on to the consumer.”
For the UK, the impact is more complex. While US buyers may purchase less British steel, the bigger problem is the potential for a flood of cheaper steel in global markets. If American manufacturers stop importing from abroad, producers in China, India, and Europe could redirect their exports elsewhere, driving down prices and squeezing UK steelmakers even further.
What About Jobs and UK Competitiveness?
Steel is already a fragile industry in the UK, battered by high energy costs and global overproduction. Unions and industry leaders warn that the tariffs will put jobs at risk.
Gareth Stace, director general of UK Steel, called Trump’s move “a sledgehammer to free trade”, while the Community union has urged the government to tax carbon-intensive steel imports to prevent the UK from being undercut by cheaper products from China and India.
The government has pledged £2.5 billion to help rebuild the UK’s steel industry, but whether that will be enough to offset the damage remains to be seen.
A Balancing Act: Trade, Politics, and Global Standing
Unlike the EU, which is responding to Trump’s tariffs with its own retaliatory measures, the UK is walking a fine line. Ministers are still pushing for a broader trade deal with the US and hoping for exemptions. But the political calculus is clear: Britain is no longer part of the EU’s economic bloc and cannot rely on collective retaliation to force Trump’s hand.
Sir Keir’s visit to the White House last month was focused on securing a better trading relationship. When asked whether the UK had convinced Trump to reconsider tariffs, the US President quipped:
“He tried. He earned whatever the hell they pay him over there.” – President Donald Trump
For now, the UK is betting that negotiation will yield better results than confrontation. But with no exemptions granted and the tariffs now in effect, British steelmakers are left waiting to see whether diplomacy will be enough.
Final Thought: Who Wins and Who Loses?
In the short term, these tariffs could push up prices in the US while squeezing steelmakers in the UK and elsewhere. Trump’s America First agenda is designed to boost domestic steel production, but history suggests it may end up hurting American consumers and manufacturers just as much.
For Britain, the challenge is clear: without the economic weight of the EU, it must navigate these trade battles alone. Whether Starmer’s government can secure a deal that protects British industry without escalating tensions remains the ultimate test.
For more of Curia’s analysis on US economic policy, and how it affects the UK, please click here.
