Trump’s steel tariffs would damage UK and US, says Business Secretary

US President Donald Trump’s planned tariffs on imports of UK steel will cause damage on both sides of the Atlantic, UK Business Secretary Jonathan Reynolds said.

The Government has promised a package of up to £2.5 billion to boost the UK steel industry and help secure its future.

A consultation was launched aimed at looking at long-term issues facing the sector such as high electricity costs, unfair trading practices, and scrap metal recycling.

But the risks facing the industry could also include the 25% tax on imports planned by Mr Trump to come into force in March.

Specialised

Mr Reynolds told the BBC’s Sunday With Laura Kuenssberg that specialised steel from the UK was used by the US Navy on its submarines and a 25% import tariff would push up the cost to US taxpayers.

“In relation to steel and aluminium, what we send to the US is very specialised, relatively niche products that the US needs,” he said.

He said: “Some of the things the US imports, it hasn’t got alternative suppliers for, the submarine casings that come from Sheffield, for instance, to the US Navy. I don’t want them paying more needlessly for that, so we can engage, and we’ve already been doing that.”

Asked what the impact of the tariffs due to come into force in March would be, he said: “It would be negative for ourselves, it would be negative for the US as well.”

He said “there is the basis for constructive engagement” between the UK and US on tariffs, but “I’m not saying it’s easy”.

“I appreciate they have a mandate for changing how they approach the issues of trade, but we have got a different argument, a different story to tell, to the EU or to China in relation to our trading relationships.”

Help for the steel industry will be available through the National Wealth Fund which ministers said could benefit areas including Scunthorpe, Rotherham and Redcar, and Scotland.

Funds will be spent on initiatives aimed at giving steel a long future such as electric arc furnaces.

The furnaces, used to recycle scrap metal into new steel, are cleaner than blast furnaces but require fewer workers – leading to job losses across the industry.

“There is a reduction in head count when you move to the new technologies that are available, that is recognised,” Mr Reynolds said.

But he said there “could be more jobs in steel in the UK” if demand can be created.

Heathrow

The announcement follows the Government’s go ahead for expansion at Heathrow Airport which will require 400,000 tonnes of steel.

The industry has faced a number of challenges in recent years, including a switch to a greener method of production at the huge plant in Port Talbot, South Wales, with the loss of jobs.

Mr Reynolds said the industry “has a long-term future under this Government”, adding: “The deal announced by Heathrow announced this week will secure a strong industry pipeline for years to come – and we are putting the full weight of Whitehall behind the industry to build on this success.”

Gareth Stace, director general of UK Steel, said: “The Government’s commitment to our steel sector is both vital and welcome. A robust, bold, and ambitious steel strategy has the power to reverse the sector’s decline, particularly as we face increasing competition from imports benefiting from more favourable business conditions.”

Unions welcomed today’s announcement.

Community general secretary Roy Rickhuss said: “After a long era of neglect under the previous government, we welcome the Government’s firm commitment to our steel industry.”

Andy Prendergast, GMB national secretary, said: “After years of dithering, today’s plan provides desperately needed funding for our once proud, now beleaguered steel industry.

“As the world becomes more volatile, primary domestic steel making capacity is vital for both our economy and domestic security.”

Investment

Unite general secretary Sharon Graham said: “The launching of the steel strategy is a critical landmark for a foundation industry, whose success is essential to the wellbeing of our economy and our national security.

“It is the first time in decades that a Government has made a positive commitment to invest in the UK steel industry.

“It is essential that all such investment is clearly linked to rock solid job guarantees.”

TUC general secretary Paul Nowak said: “If we want to make more products here in Britain and compete globally we need to be able to produce steel here.”

Shadow business secretary Andrew Griffith said: “We look forward to seeing the details of this plan. A clear part must be steps to reduce the cost of energy which is placing an intolerable strain on UK steel.”