US President Donald Trump confirmed long-mooted plans for a 25 per cent tariff on imports this week, leading to fears that Britain and Europe could once again become a dumping ground for cheap foreign-made steel.
The tariff - which Mr Trump said was aimed at protecting national security and American jobs - could trigger a full-blown trade war if the European Union responds with countermeasures.
Trade body UK Steel said the tariffs could be “utterly devastating”, while the Community union demanded action to protect British jobs and avoid a “global trade war”.
The UK exported some 350,000 tonnes of products to the US in 2017, more than 7 per cent of its total exports.
International Trade Secretary Liam Fox is to visit Washington next week to seek an exemption from the US on the planned levies, saying it would be “absurd” for the UK to be included in Mr Trump’s tariffs.
But even if an exemption was offered to the UK, it was unclear whether it could be accepted while Britain remains a member of the EU unless it applied to the whole 28-nation bloc.
Responding to Mr Trump’s move, a Number 10 spokesman said: “Tariffs are not the right way to address the global problem of over-capacity. That requires a multilateral solution.
“We will work with EU partners to consider the scope for exemptions and continue to work with all sectors involved in this to robustly defend the interests of our industry.”
Pressed over whether EU rules could block the UK from benefiting from a bilateral exemption while it remains a member, the Downing Street spokesman said: “We want to work with our partners to consider the scope for exemptions.
“Obviously we remain a full member of the EU and that’s why we’re going to work with our EU partners.”
A spokesman for British Steel which has large plants in Scunthorpe and Teesside, told The Yorkshire Post: “US sales represent a small percentage of our exports and while disappointed by the announcement, we look forward to working with our valued American customers to fully understand the implications of Section 232.
“Tariffs will impact on the world market so we’ll continue working directly with the UK Government, and UK Steel, on this matter and to ensure Britain and Europe don’t again become dumping grounds for cheap steel.”
UK Steel’s director Gareth Stace said Britain’s steel industry was emerging from a “fragile recovery” which the tariffs would undermine while Roy Rickhuss, general secretary of Community, said the move would put jobs at risk on both sides of the Atlantic.
On BBC’s Question Time, Dr Fox said Trump’s tariffs were “the wrong way” to tackle the problem of cheap steel being dumped on the US market.
What is Trump proposing?
Donald Trump is to impose a 25 per cent levy on steel imports and a 10 per cent tariff on aluminium in response to what he called an “assault on our country” from cheap overseas metal.
Supporting US industry was a cornerstone of the Republican’s campaign in 2016 with America’s international trade deals a frequent target for his barbs.
There will be exemptions for North America Free Trade Agreement (Nafta) states Mexico and Canada, and Mr Trump said opt outs for other countries were possible.
Mr Trump said if his goals could be accomplished “by other means” the US will remain “open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security”.
A similar policy by George W Bush in 2002 is widely agreed by economists to have ended in failure.