Steel industry demands rapid resolution to tariff uncertainty
Car makers and aerospace manufacturers have welcomed the UK-US trade deal that came into force on Monday, but steelmakers have warned that delays to tariffs on their exports coming down are “paralysing” their industry.
The UK is the only country to have secured a trade deal with the US since Donald Trump’s ‘Liberation Day’ reciprocal tariffs, signing the agreement at the G7 summit earlier this month.
Prime Minister Keir Starmer said the agreement, referred to as the Economic Prosperity Deal (EPD), is going to safeguard key industries that are vital to the British economy by cutting steep levies set by President Donald Trump in April.
But an agreement is yet to be made for the steel, despite the sector having previously been included in the pact. US tariffs on steel and aluminium still stand at 25 per cent rather than falling to zero as originally agreed.
Fees could rise to 50 per cent on UK steel and aluminium unless an agreement is reached by 9 July, when the negotiating pause is set to expire.
Gareth Stace, director-general of UK Steel, said: “Time is running out to secure a UK-US steel deal and remove damaging tariffs.
“Every day of delay costs our steelmakers dearly. Contracts are being lost, investment decisions remain on hold, and uncertainty is paralysing business decisions. We urgently need a swift, positive resolution to these talks to protect jobs, unlock growth, and restore confidence in the sector.”
Exports of goods to the United States, including precious metals, fell by £2bn in April 2025.
However, some sectors are set to benefit. The aerospace industry will see its 10 per cent tariffs on US exports slashed to zero on some components like jet engines.
Tariff certainty a ‘relief’ for auto and aerospace sectors
ADS Aerospace Director, Balaji Srimoolanathan said: “The relaxation of aerospace tariffs to zero per cent for the UK aerospace sector as part of the UK-US Economic Prosperity Agreement is a major step in restoring the free movement of aerospace parts and engines.”
According to data from the Office for National Statistics, the UK aerospace industry delivered £20bn in exports in one year, adding a value of over £13bn to the UK economy in 2024.
“With this relief and the supportive Industrial Strategy, industry welcomes the sustained effort from government to ensure our sector continues to remain competitive and delivers opportunity and growth across the UK,” Srimoolanathan added.
UK car manufacturers will also get a preferential route to US exports, allowing manufacturers to sell up to 100,000 automobiles to the US with levies reduced from 27.5 per cent to 10 per cent.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders said the agreement was “a huge relief for the UK automotive companies that export to this critically important market”.
“It immediately slashes the punitive tariffs that brought the US export market to a standstill and threatened the viability of some of the most famous names in British manufacturing… UK companies can look to the future with more optimism,” he added.
‘Concerns remain’ for farmers
The UK-US trade deal also wrought significant changes on Britain’s agriculture and farming industry, with a tariff-free quota on British and American beef applied.
The government has said that hormone-treated beef from the US will not enter the UK market – a longstanding red line of the agricultural sector – but farmers and consumers are demanding for more details on how border checks will be put in place to ensure safety measures are maintained.
Tom Bradshaw, president of the National Farmers’ Union (NFU) said: “Concerns remain about the impacts of the US trade deal on the food and farming sector. We need certainty that the US hormone-free beef supply chain is robust, and it’s vital that thorough checks and sampling take place at the border to ensure no hormone-treated beef is inadvertently allowed though.”
Farmers are also concerned the abolishment of UK’s 19 per cent tariff on bioethanol could mean domestic producers face extinction.
The new tariff changes will likely make things tougher for UK ethanol producers, who have already been struggling from more competitively priced US ethanol imports.
The NFU raised concerns that US bioethanol imports could displace British production of the fuel.
“Alongside hitting arable farmers, this would have wider implications for other sectors which rely on the animal feed and the carbon dioxide produced through bioethanol production,” Bradshaw said.
“With new access for American beef and ethanol in force from today, we urge the government to act to minimise the impacts of potential increased imports on our economy and our food security. We also urge both governments to confirm the UK’s allocation for beef exports as soon as possible to ensure access to the US market for 2026.”
The “historical deal”, as defined by Starmer, comes after the UK government has long aimed for a full post-Brexit free trade agreement with the US.