UK steelmakers have narrowly avoided being hit with a damaging 50% import tariff by the United States – for now – after President Trump signed an Executive Order confirming that the UK will remain under the existing 25% tariff while a new bilateral steel agreement is finalised.
The temporary reprieve comes despite earlier warnings that British steel exports would face the sharp hike from Tuesday, following the White House’s move to double tariffs on imports from countries not covered by trade exemptions. The UK, which currently falls under the original 25% tariff imposed in March, has been granted a stay of execution – but only until 9 July, by which time the Economic Prosperity Deal (EPD) between the UK and US must be concluded.
In a statement, UK Steel said the decision provides a “time-bound vote of confidence” in British steelmakers – but warned the lack of clarity surrounding final tariff rates and deal timing risks destabilising transatlantic trade, with nervous US buyers potentially looking elsewhere for supply.
Gareth Stace, Director-General of UK Steel, welcomed the breathing room: “The President’s decision not to impose a 50% tariff on UK steelmakers, but to keep the rate at 25% while the UK-US deal is completed, is a welcome pause. The Business Secretary, Jonathan Reynolds, recognises that steel trade stability and security between our two nations is of utmost importance and has acted swiftly.”
He added that the maintained 25% rate would spare British producers from immediate disruption on shipments already in transit, but stressed that hesitation from US customers now looms large. “Uncertainty remains over timings and final tariff rates, and now US customers will be dubious over whether they should even risk making UK orders.”
The US is the UK’s second-largest export market for steel, valued at around £400 million annually and accounting for 9% of total UK steel exports by value. Trade relations were expected to improve after the May announcement of the UK-US Economic Prosperity Deal, which promised to scrap existing tariffs and replace them with a quota-based system allowing tariff-free trade within set limits. But that deal is yet to be finalised and enshrined in law, leaving exporters in limbo.
The situation underscores the delicate balancing act facing the UK Government, which must both preserve its trading relationship with Washington and protect a struggling domestic steel industry facing stiff global competition, low demand, and mounting import pressure.
Stace called for renewed urgency on both fronts: “The US and UK must urgently turn the May deal into reality to remove the tariffs completely. At an already crushing time for our steel industry, with global oversupply and weak demand, we must continue to work together to support sales levels in our second most important export market.”
He also renewed calls for stronger domestic trade defence measures, pointing to a surge in steel imports from outside the EU. “There is plain evidence of trade diversion switching gears into the UK after the EU stepped up its trade defences, and now we must do the same. Imports are flooding into the UK market, depressing steel prices and taking away market share. We must not lose sight of our domestic market while battling to stabilise exports to the US.”
The UK Government has not yet confirmed a timeline for the final signing of the steel trade agreement, but with just weeks until the 9 July deadline, the pressure is mounting to provide the sector with long-term certainty. Without it, industry leaders warn that job losses and production cuts could follow – and that the fragile recovery of UK manufacturing could be at risk.
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UK steelmakers avoid immediate 50% US tariff, but face growing uncertainty as deal hangs in the balance