The UK will seek an exemption from President Donald Trump’s tariffs on steel and aluminium imports to the US, according to Trade Secretary Liam Fox.
Mr Fox says he will travel to Washington next week when he will discuss the new duties.
He said: “We will, of course, be looking to see how we can maximise the UK’s case for exemption under these particular circumstances.” Steel imports will carry a 25% tariff while aluminium will have a 10% duty. UK Steel says 7% of its steel exports go to the US, worth £360m. The European Union says it will be asking for an exemption to the tariffs.
President Trump claims that the US has suffered from “unfair trade” and that the tariffs will boost the domestic market. Mr Fox said:
We understand the anxieties about steel over-production that the United States has but we believe there are other ways to tackle that on a multilateral basis.
Mr Trump’s decision, which comes into effect in two weeks’ time, has provoked widespread condemnation from the likes of China and France. It also prompted the resignation of Mr Trump’s chief economic adviser Gary Cohn.
Shooting itself in the foot
Gareth Stace, director of UK Steel, said: “Slapping a 25% tax on steel from British companies is going to hit us hard.” He added: “It worries me that I don’t think the Trump administration has quantified what it can supply from its own market and what it can’t. Therefore, it is actually shooting itself in the foot by increasing costs to the US steel sector and US manufacturing sector by 25%.” A spokesman for steelmaker ArcelorMittal said the industry faced a number of problems: “The steel industry has been characterised in recent years by overcapacity, high levels of imports and unfair trade. “We have appreciated the efforts made by governments to address unfair imports in support of a level playing field. Fundamentally a solution must be found to address the high level of overcapacity that still exists. This is particularly important given steel’s globally traded nature.”
UK exports of aluminium to the US are tiny, but the UK’s Aluminium Federation fears a trade war all the same. Aluminium Federation president Giles Ashmead said: “The proposed 10% tariff on aluminium entering the US is regrettable. “While the US is not a major export market for UK-produced aluminium, indiscriminate tariffs are a hindrance to free trade, and do little to secure a ‘level playing field’ for global commerce.” Canada and Mexico will be exempt from the tariffs while negotiations continue over the North America Free Trade Agreement (Nafta). The final round of Nafta talks is due to be held this spring in the US.