Will we finally see the lifting of US tariffs on steel?

Last week, the UK and US issued a joint statement on global steel and aluminium capacity, following a call between the UK Trade Secretary Anne-Marie Trevelyan and the US Secretary of Commerce Gina Raimondo and US Trade Representative Katherine Tai. This included the announcement of the start of bilateral discussions between the US and UK on resolving US tariffs currently levied on UK steel, and the potential retaliatory tariffs the placed by the UK on US goods such as whiskey, clothing and electric motors.

How did we get here?

The US tariffs steel (25%) and aluminium (10%) stem from a President Trump action that placed tariffs on goods from the EU in the name of national security – avoiding what the US saw as dumping of foreign steel and aluminium into their domestic market. The US and EU agreed bilaterally that these tariffs would be lifted from 1 January 2022 for EU steel and aluminium, but the US is yet to lift them on UK produced goods.

Why is this a problem?

The imposition of US tariffs on UK steel and aluminium leaves the UK market at a competitive disadvantage, especially now that the same tariffs have been lifted for EU producers. ADS has closely followed the regular updates on trade with the US, as the protectionist policies such as these tariffs serve only to hinder the global economic recovery, especially as we emerge from the COVID-19 pandemic.

A forthcoming solution?

The removal of US tariffs on steel aluminium would be a welcome demonstration of the de-escalation of trade tensions between two economies as close as the US and UK. The recent settlement of the long-running Airbus-Boeing trade dispute was a clear signal of a more positive trade environment between Europe and the Biden administration in Washington, D.C – the announcement of the start of further UK-US discussions on resolving issues around steel tariffs would be a further positive step in the right direction.

ADS will continue to engage closely with members, industry bodies and Government to ensure that our sectors’ voices are heard. We would welcome any additional feedback from members on the direct effect of any of these tariffs.