The UK government has signalled it will push for an exemption from Donald Trump’s planned 25% tariffs on British steel, as concerns grow over the potential impact on exports and domestic pricing.
Business Secretary Jonathan Reynolds said the UK had a strong case for avoiding the new US border taxes, highlighting that Britain’s steel exports to the US were relatively small and often used in strategic sectors such as defence.
The former US president has previously insisted that the tariffs—set to take effect on 12 March—will be enforced “without exceptions or exemptions.”
Despite pressure from the steel industry to respond with countermeasures, the UK government has indicated it will not immediately retaliate, in contrast to the European Union and Canada, which have vowed to hit back.
The UK is not a major steel supplier to the US, with the market accounting for just 10% of British steel exports. However, for some specialist producers, the American market is vital.
Beyond the direct impact on exports, there are concerns that excess steel could be “dumped” in the UK, as countries locked out of the US market seek alternative buyers, potentially undercutting British steelmakers.
Reynolds acknowledged the global oversupply of steel and aluminium but insisted that the UK is not the problem. He also suggested that Britain would be reluctant to support retaliatory measures led by the EU, arguing that “the UK national interest is best served by free trade.”
Trade tariffs are paid by importing businesses, not foreign producers, meaning US companies will bear the immediate cost of the new levies. However, there are fears that this could push up inflation if importers pass on the additional expense to consumers.
In some cases, businesses may absorb the costs or reduce imports altogether, which would hit foreign exporters—including UK steelmakers.
The looming tariffs add to growing uncertainty for British businesses, many of which are already preparing for higher taxes from April.
Reynolds admitted that the tax increases outlined in the Budget were “challenging” for businesses but said the government was “asking a lot” from them as part of its broader economic strategy.
Recently Reynolds announced new guidance for the Competition and Markets Authority (CMA) to act faster and with less risk aversion, amid concerns that overregulation is stifling economic growth.
His comments come after the CMA’s chair was recently ousted by ministers over claims that the regulator was too slow and bureaucratic.
Hinting at a broader regulatory shake-up, Reynolds questioned whether Britain has the right number of industry watchdogs: “I think we have to genuinely ask ourselves, have we got the right number of regulators?”
As businesses navigate the twin challenges of higher taxes and potential trade barriers, the UK government is facing growing calls to ease the regulatory burden while securing the best possible trade terms with the US. Whether it succeeds in gaining a steel tariff exemption remains to be seen.
