Donald Trump state visit: UK shelves plans for 0% US steel tariffs despite trade deal

One of Sir Keir’s main priorities would have been to reduce levies on steel and aluminium imports to zero, in line with the agreement with Mr Trump in May.

In the months since, tariffs have been reduced on the car sector, as per the deal, however the UK has continued to be hit with a 25 per cent import tax on steel.

This continues to give firms, like British Steel in Scunthorpe, a competitive advantage against the rest of the world, which has a 50 per cent tariff.

Mr Trump hinted at possible tariff relief for British steel as he boarded Air Force One to fly out to the UK.

However, it has now emerged that the Government has paused its push to cut the levy to zero, in a blow to the sector which is already reeling from major financial difficulties in recent years.

It is understood that Britain could have sought a small tariff-free quota for its steel exports to America as part of ongoing trade talks, but that this would leave the rest exposed to the 50 per cent US global tariff faced by other nations.

The Yorkshire Post understands that the issue relates to the US rules of origin for steel products like those produced at Port Talbot, in Wales, where semi-finished products come into the UK and then go to the mills.

Community assistant general secretary Alasdair McDiarmid, who represents steelworkers in Scunthorpe, said: "We are naturally disappointed to hear reports that a 0 per cent tariff for UK steel producers exporting to the US will not be progressed further at this stage.

"At the same time, the UK is in a much stronger position than other countries which remain subject to a 50 per cent tariff.

“That punitive scenario has been only avoided because of the efforts of the UK government in negotiations with US counterparts, and they deserve credit for that ongoing important work.

“We will continue to work closely with government to secure support for our steel industry, including through the upcoming Steel Strategy.”

Director-general of industry trade association UK Steel, Gareth Stace said that it was “even more imperative now” for the Government to beef up its own trade defences to ensure British steelmakers “have a sustainable share of their own market.”

“In these market conditions, the last country to protect their industry will be the first to lose it,” Mr Stace said.

Industry sources also expressed concerns that other trading partners may look to the UK’s arrangement in pushing to lower their own US tariff rates on steel, which could make Britain’s position less competitive.

The Liberal Democrats said the Government had “thrown in the towel” to the US president, who “reneged on” the original agreement for US steel tariffs to fall to zero as part of the British-American trade pact.

A government spokesperson said: “Thanks to the strength of the UK-US partnership, we are still the only country to benefit from a 25 per cent tariff on steel exports to the US, reinforcing our position as a trusted source of high-quality steel.

“We are continuing to work closely with the US to deliver certainty for UK industry, protect skilled jobs and support economic growth as part of our plan for change.”