Britain’s steelmakers are braced for “serious damage” from President Trump’s “unilateral” decision to slap a swingeing 25 per cent tariff on steel imports into the United States, it has emerged.
Industry trade body UK Steel said the new tariffs – flagged by the president on Thursday and including a 10 per cent tariff on aluminium imports as well – were short-termist and “rife with unintended consequences”.
Industry sources said all British steelmakers faced a severe backwash from such a “trade war”, including Scunthorpe-based British Steel, Tata Steel and Sanjeev Gupta’s Liberty House Group, the latter owning Scottish plants at Dalzell and Clydebridge.
Richard Warren, head of policy at UK Steel, said: “Whilst we still await the precise detail of these measures, and there is still a lingering hope that these tariffs may not target the UK and EU, President Trump’s comments do indicate the introduction of blanket measures to restrict all steel imports regardless of their origin.
“This would be a unilateral, and extremely blunt approach to what is a complex global problem of overcapacity in the steel sector.
“This requires a coordinated global approach. Whilst we all too well understand the frustrations of the US sector, measures such as these smack of short-termism, protectionism and would be rife with unintended consequences for global trade and for the users of steel in the US.”
Currently, the UK steel industry exports £360 million of high-value steel products into the US each year. The UK sector has seen major jobs bloodletting and consolidation in recent years in the wake of high energy and environmental costs, cheap imports from China and the weakness of sterling.
Warren said of Trump’s new tariffs: “These measures would seriously undermine our ability to compete in this market. Equally there is significant apprehension about the indirect impacts of these measures in the form of steel trade diverted away from the US to other markets, such as the UK. In short, these measures would cause serious damage to the prospects of many steel producers here.”
He added that UK Steel wanted the UK government to “push for and fully support a robust response from the EU”.
Lukman Otunuga, analyst at FXTM, said Trump’s move had “sparked fears of a global trade war”. He added: “This bombshell development is likely to fuel concerns of retaliatory actions from major US trade partners. Investors are clearly jittery [at] the threat of a potential global trade war and its possible effect on stock markets.”
Dalzell is fully operational, with 176 workers. Clydebridge is used part-time as a finishing plant for some of the steel made at Dalzell. The Liberty House aluminium smelter at Fort William employs 180 people and the aluminium wheels factory being built next door will employ more than 400.