US Steel Import Tariffs

(Urgent Question): To ask the Secretary of State for Business and Trade if he will make a statement on US steel import tariffs.

We have seen the proclamation issued by President Trump overnight, which enforces a full return to 25% tariffs on US steel imports on 12 March 2025. The US has so far published details only on steel, not on aluminium. The intended effect of the proclamation is to revoke existing arrangements that have avoided those tariffs, such as the UK-US resolution, as well as any separately agreed product exclusions from the tariffs.

What British industry needs and deserves is not a knee-jerk reaction but a cool and clear-headed sense of the UK’s national interest, based on a full assessment of all the implications of US actions. The Minister of State for Industry is meeting representatives of the steel industry and trade unions this very afternoon, and the Secretary of State for Business and Trade is in touch with representatives of the British steel industry and will meet them in the next 24 hours. Since July, we have engaged in a systematic way with the UK steel sector, and we will continue to engage with UK industries impacted by potential tariffs.

Historically, we have benefited from a strong and balanced trade relationship with the United States—worth around £300 billion and supporting millions of jobs. In trade policy, we stand ready to work with President Trump to find solutions that work for both the United Kingdom and the United States.

The United States is our greatest ally and our greatest single trading partner. The UK and the United States are the biggest investors in each other’s economies. Yet this is a moment of great peril for the UK steel industry, because the Government have failed to engage with gusto with the new US Administration. The Prime Minister has not, despite his many air miles, got on a flight to the States at the first possible opportunity, and years of student politics-style insults hurled at the President by Government Front Benchers has put our relationship in jeopardy. And that was before the embarrassment of the Chagos islands situation showed that we have terrible negotiators running the country.

Can the Minister confirm what conversations he or the Secretary of State have had with their counterparts in the United States about steel tariffs? How many times has the Minister spoken with US trade representatives about this matter since Sunday? Will he confirm that the first 500,000 tonnes of steel to the US will be tariff-free, as they were under President Trump’s previous Administration? What economic analysis has the Department produced on the impact of the tariffs on jobs and on the wider UK economy, and what plans do the Government have to reciprocate with tariffs on US steel and aluminium, or on any other US goods? What are the Minister’s plans for the safeguarding measures against steel dumping, which expire in June?

We on the Conservative Benches have been calling on the Government to strain every sinew for a trade deal with the United States. Much work was done by the Department last time President Trump was in the White House. Will the Minister finally set out what plans the Government have to obtain a big, beautiful free-trade agreement with the United States?

Well, well—let me try to answer the various questions that the shadow Minister asks. First, on the big, beautiful deal that the Conservatives contemplated, I simply observe that that was one of a whole number of trade deals that they boast about but abjectly failed to deliver.

The hon. Lady described this as a moment of great peril for the UK steel industry. Frankly, we saw the UK steel industry suffer from a degree of neglect for many years under the previous Government. That is why we are the first Government in many years to set out a comprehensive steel strategy, including a commitment of £2.5 billion towards the future of the steel industry. We will take no lectures from Conservative Front Benchers on the UK steel industry.

On the hon. Lady’s substantive question about the degree of contact that we have had with the US trade representative, it may have eluded her attention that we do not yet have a confirmed US trade representative. We anticipate that Jamieson Greer will be confirmed by the US Senate in the next couple of weeks. Similarly, she might suggest that it is important for the Secretary of State to meet Howard Lutnick, the US Secretary of Commerce, but, alas, I must inform her that Howard Lutnick has not yet been confirmed. We stand ready to engage with the incoming Administration—be that with the USTR or the Secretary of Commerce—once we are in a position to do so.

In terms of the economic analysis, I hope the hon. Lady will understand, given how sensitive these issues are as we anticipate the further steps to be taken by the Trump Administration, that it would not be an altogether wise negotiating strategy to share the detail of the internal UK analysis of the potential effects of tariffs, which, I remind the House, are not due to be imposed until 12 March.

I call the Chair of the Business and Trade Committee.

What is essential now is that this does not escalate. Widespread duties on UK exports to the US would be devastating for economic growth, bad for inflation and bad for interest rates. The whole House ought to wish His Majesty’s new ambassador, Lord Mandelson, the very best of luck in the conduct of his new tasks in Washington. What flexibility will the Minister allow on increasing funding to UK steelmakers through the steel strategy if they confirm that that is essential to maintain a sovereign capability in this country?

I am grateful to my right hon. Friend for his generous words about the incoming UK ambassador to Washington, who—notwithstanding his commitment at the weekend to fly under the radar—is already in post and is making necessary calls. He is but one of the key interlocutors we have established with the incoming Administration, and—reflecting the earlier questions that we were asked—we are already actively engaged with the US Administration.

More broadly on the approach to the UK steel industry, my friend and colleague the Minister of State for Industry is this afternoon meeting representatives of the steelmaking trade unions and representatives of the principal steel companies in the United Kingdom. The Secretary of State will further that dialogue in the next 24 hours. There has already been outreach to the UK Steel trade body. In relation to the commitment for the steel strategy that we are due to unveil in the spring, I can assure my right hon. Friend that there is already a very active dialogue that will incorporate issues related not just to potential tariffs but to the risks of trade diversion, and to the substantive issues that he raises.

I call the Liberal Democrat spokesperson.

Donald Trump’s tariffs will cause much uncertainty across the world, not least for those working in our great British steel industry. Tariffs are not just bad news for UK steel producers; they would have a tangible effect on people’s lives, from lower economic growth to higher inflation. It is not likely to end with steel, so we may well be caught up in America’s economic vandalism. Will the Minister set out how US tariffs may affect the UK economy and what preparations are being made as a result, and does he agree that British jobs are on the line and that businesses and workers want to see the Government stand up for them?

To give a sense of quantum to the House, about £400 million-worth of UK steel exports go to the United States. That represents, if I recollect accurately, about 10% of UK production, so the hon. Gentleman is entirely right to recognise that this is a significant moment.[Official Report, 12 February 2025; Vol. 762, c. 6WC.] (Correction) We take that very seriously, which is why we are engaging in dialogue with both the workforce and the owners of the various steel producers here in the United Kingdom. More broadly, as my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) alluded to, we want to avoid a significant escalation. We saw retaliatory measures taken under the first Trump Administration. It feels to me that this is an opportunity for the UK to exercise a cool head and a clear-eyed sense of where the national interest lies. These tariffs will not be imposed until 12 March, which gives us time to undertake the dialogue that is already under way, to reach a judgment on the basis of the analysis that we have already done, and to ensure that our interlocuters in Washington and elsewhere are engaged in a constructive and mature dialogue.

It is quite evident that tariffs will have a negative impact on the UK economy. Among all the palaver in the imposition of tariffs, the impact on workers—on their jobs and livelihoods—is often forgotten. In formulating a response to the proposed tariffs, I ask that we work closely with trade union representatives to ensure that the workers are not forgotten in all of this.

I am happy to give that assurance. I should probably declare an interest as a member of the Community trade union. I can assure the House that trade unions—whether Community, the GMB, Unite or the other representatives of steelworkers—have been a central part of the dialogue that we started in July. Frankly, we inherited a situation in which there had been significant under-investment in steel capability in the United Kingdom for many years. We are backing up that commitment to dialogue with an act of commitment to public funds, and we are doing so in dialogue with the workforce as well as with the companies themselves.

The Minister is quite right that we do not want a knee-jerk reaction, but I gently point out to him that this announcement should not have come as a surprise, bearing in mind the President’s comments both before and after the inauguration. Many of my constituents who work at the Scunthorpe steelworks already face an uncertain future, and this will just increase their concerns. Can the Minister give an assurance that he will report back to the House as soon as possible about the meetings that will take place over the next day or two?

There are plenty of opportunities for Ministers to be held accountable in relation to the dialogue that we have started, and that we continue, with steel producers in the United Kingdom.

Turning to the hon. Gentleman’s initial point about whether this announcement has come as a surprise, candidly, it has not. However, it is also fair to recognise that the new President has a speciality in generating uncertainty—part of his style of negotiations is creating uncertainty as to what will happen next. As I sought to suggest in my opening answers, we have answers on steel today, but the proclamation that emerged overnight did not give us answers on aluminium. In those circumstances, it is right and reasonable to be mindful of the statements that have been made, which I can assure the House that we were, and to undertake analysis, which I can assure the House we are also continuing to review and reach a judgment on.

At the same time, we should recognise that the date on which these tariffs come into effect is 12 March. As a consequence, there is a window of opportunity to not only engage with the workforce and the companies to ensure that we better understand exactly what they are looking for in light of these specific measures, but critically, to engage directly with the Trump Administration. That is work to which our ambassador is already turning his mind.

Let us not forget that steel is a strategically important industry, both for our economy and our national security, and if other countries are going to be protecting their steel industry, our Government must not be afraid to make the big fiscal choices required to protect our own. Will the Minister assure the House that responding to these tariffs will be a priority for this Government, as will putting the industry on a sure footing in the years ahead?

In terms of being willing to make the big fiscal choices, we have committed £2.5 billion of public money since July to support the steel industry, with resources being funnelled in part through the national wealth fund. I can assure my hon. Friend that we have already been willing to put money, as well as commitment, behind the steel industry. He is absolutely right to recognise the strategic significance of this industry, not just on its own terms but much more broadly to the manufacturing capability of the United Kingdom. He has alluded to the risk of trade diversion, given the potential remedial action taken by other trading blocs, so I also want to assure him that we have protections that will remain in place until 2026. There are safeguards in place in relation to trade diversion, as well as the UK’s ability to act independently.

I have listened very carefully to what has been said this morning. We have known since November that this was coming, even though the press were saying that we would somehow get a special relationship. What is clear today is that Trump shows strength towards countries that are in a position of weakness, which is where the UK currently is. Is it not now time for this Government to think very seriously about being back in the EU, where there is strength against strength through the customs union and the single market? We do not know what else is coming down the line, and Scottish businesses need to know the future—it could be whisky, it could be fish or it could be manufacturing. Can the Minister give us some assurance about how he will stand up to the strength of global protectionism?

In terms of an understanding of Scottish business, again I should probably declare an interest, given that the Glenkinchie distillery is in the Lothian East constituency. Only this morning, I met with Chivas Regal and Diageo, so I can assure the hon. Gentleman that I am fully aware. Certainly, no one party should claim to speak for Scotland, or for Scotland’s businesses.

As for the United Kingdom’s departure from the European Union, it is no secret that I was a remain campaigner and wanted the United Kingdom to stay within the European Union in 2016. I would gently point out to the hon. Gentleman that had his party been successful in its endeavour to break up the United Kingdom in 2014, the direct and immediate consequence of that choice would have been Scotland’s departure from the European Union.