UK bid to eliminate US steel tariffs shelved as Starmer prepares to meet Trump

The UK Government has paused plans to implement an agreement to eliminate US tariffs on British steel, officials said, leaving punitive levies of 25% in place as Prime Minister Keir Starmer prepares to meet US President Donald Trump during the president’s state visit to Britain this week.

The proposals — first announced by Starmer in May alongside a deal covering cars and steel — have not been introduced after American concerns that a zero-tariff arrangement could provide a back-door route for cheap Chinese steel into the US market. UK officials spent recent days in Washington trying to rescue the original plan but concluded it would not be implemented, according to Whitehall sources.

The climbdown marks a reversal of the announcement Starmer described in May as a "historic" and "fantastic" deal that would save jobs in the British steel sector. Government sources said ministers are now focused on securing a permanent preferential tariff of 25% for the UK, rather than the 50% rate applied to other countries.

Gareth Stace, director general of UK Steel, said the sector was disappointed not to receive the zero-tariff deal but acknowledged some benefit from clarity and the lower rate compared with competitors. "I'd be lying if I didn't say that we weren't, as the steel sector in the UK, disappointed not to get the zero tariff deal with the US that was announced on 8 May," he told Times Radio. "We have that business certainty that we are not shifting around in the level of tariffs, but also that we're not paying 50% like the rest of the world."

Cabinet minister Liz Kendall said the Government continued to work to reduce tariffs, calling the UK "the only country in the world who have this lower rate of tariffs." She added ministers were "working hard still on that and many other aspects of the trade deal." The Government has not released a detailed timeline for further negotiations.

Opposition figures and trade experts criticised the reversal. Conservative MP Andrew Griffith, the shadow business and trade secretary, said the prime minister had incorrectly claimed credit for securing zero tariffs. "Now it turns out that was untrue and it's actually 25 per cent," Griffith said. Liberal Democrat deputy leader Daisy Cooper said the outcome suggested the Government had "thrown in the towel" and accused the US administration of reneging on promises.

David Henig, a former UK trade negotiator now at the European Centre for International Political Economy, said the episode illustrated the limits of what a UK government can extract from the US on trade issues. "Once again I fear a UK Government has mistaken having a trade deal dictated to them for their own negotiating brilliance," he said.

Labour MP Liam Byrne, chair of the Commons Business and Trade Committee, warned that the state visit should not be treated as mere pageantry. He said Britain now trades with its largest partner on terms that, in his view, are worse than in the past.

The steel issue forms part of a broader diplomatic and trade backdrop to the state visit. Trump arrived in the UK this week for his second state visit, amplification of ties between the two countries that have included high-profile announcements on tariffs and market access. Whitehall sources said US resistance centred on safeguards against Chinese steel entering US markets via preferential arrangements with other countries, concerns that Washington has raised with multiple trading partners.

Trade negotiations between the UK and the US have been politically sensitive for both governments. Starmer’s May announcement had been framed as a response to Trump's earlier imposition of sweeping tariffs on a range of imports to the United States. The withdrawal of the zero-tariff implementation is likely to intensify scrutiny of what the state visit will deliver in substantive trade terms.

Ministers and industry groups will now weigh the immediate impact of the 25% tariff on exports and whether the retained preferential rate — if formalised as permanent — will provide sufficient competitive advantage against countries facing the higher 50% levy. The Government said it would continue discussions with US counterparts but did not provide a timeline for further changes to tariff arrangements.