UK steel industry braces for trade collapse as US cuts tariffs on EU | Steel industry

The UK steel industry is bracing for an immediate drop in trade from New Year’s Day, when competitors in the European Union get a 25% price advantage by selling into the giant US market.

The EU and the United States have reached a Halloween deal to remove tariffs on a quota of steel and aluminum imported from the block into the United States from January 1, but tariffs will remain on all exports British steel and aluminum after government talks failed to achieve a corresponding breakthrough.

International Trade Secretary Anne-Marie Trevelyan earlier this month invited the US Trade Secretary for further talks in London, which should be scheduled for January. However, an industry source said she was not optimistic that a deal would be reached quickly.

Tariffs were first introduced by former President Donald Trump in 2018 under Section 232 of the Trade Expansion Act for national security reasons. Imports would have undermined the ability of the United States to produce its own steel.

UK exports to the EU could also be affected due to an unusually strict clause in the EU-US agreement which means that steel originating in the UK will still be subject to tariffs even if it does. is processed and exported by EU companies.

Gareth Stace, Managing Director of UK Steel, said: “UK steel exports to the US have halved since President Trump introduced tariffs on steel in 2018. He does not there is no doubt that these measures have significantly harmed the interests of the UK in its second largest steel export. Marlet.

“While we welcome the US decision to start easing tariffs, without a very early UK deal, our export position will only deteriorate further. It is essential that the government do everything it can to strike a deal and ensure that UK steelmakers are able to sell their steel to the US. “

Harish Patel, national iron and steel manager at Unite, a union representing many UK steelworkers, said the government must explain why the EU had reached a deal but the UK did not, amid reports that states United were restraining UK threats to unilaterally change post-Brexit trade rules governing Northern Ireland.

The UK negotiated the so-called Northern Ireland Protocol just over a year ago as part of the Brexit trade deal with the EU, but has repeatedly said it could break it unilaterally. President Joe Biden has warned Boris Johnson of a threat to peace on the island of Ireland.

Junior Minister for International Trade Penny Mordaunt this month denied that the failure to reach a steel deal was linked to Brexit. She told parliament: “This story may be true in terms of how some people in the United States feel, but it is a false story. These are two completely separate issues. “

Sign up for the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Patel said: “It is alarming that steel produced in the UK is effectively being excluded from the critical steel market, as ongoing tariffs make EU steel considerably cheaper.

“The government must resolve this matter quickly. Unless tariffs are quickly lifted, hundreds of jobs in the steel and allied industries, most in the so-called Red Wall sieges, are at risk. “

A government spokesperson said: “We recognize the vital role the steel sector plays in our economy and our priority is to resolve this dispute for the benefit of workers and businesses on both sides of the Atlantic, by removing the need for the UK to charge retaliatory tariffs. on American goods.

“Until this resolution is adopted, the UK will continue to apply its rebalancing measures to defend our economic interests and the rules-based international trading system.”

Source link