UK hopes for zero US steel tariff put on hold

A proposed deal to eliminate the 25% tariff on UK steel exports to the United States has been put on hold indefinitely, UK government and industry sources said, dashing hopes of a rapid resolution that ministers and producers had welcomed earlier this year.

The tariff currently applied to steel exported from the United Kingdom accounts for about 6% of UK steel exports by volume and about 9% by value. The government said it remained in talks with US counterparts and stressed the UK’s competitive position relative to other countries, noting some nations face duties of 50%.

"We are still the only country to benefit from a 25% tariff on steel exports to the US, reinforcing our position as a trusted source of high-quality steel," a government spokesperson said, adding that officials believed there "remains a path to zero" even as short-term progress stalled. The spokesperson also said ministers were "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."

The pause followed fresh scrutiny from US officials about the origins of some UK steel, particularly shipments linked to Tata Steel, the country’s largest producer. Tata has shut down its blast furnaces and said it will rely on new electric arc furnaces, which are due to be completed in 2027. US questions have focused on whether steel exported from the UK is produced "from scratch" domestically under the terms relevant to tariff determinations.

Industry responses were measured. Executives described the hold-up as disappointing but pointed to a relative advantage in a market where several competitors face higher duties. When the 25% tariff was first imposed, steel executives described the move as "devastating," and when ministers and industry celebrated what appeared to be an agreement to remove the duty in July, it was greeted with fanfare.

Gareth Stace, director of trade body UK Steel, urged the UK government to strengthen its own trade protections. "It is even more imperative now that the UK government beefs up its own trade defences to ensure UK steelmakers have a sustainable share of their own market," he said. "In these market conditions, the last country to protect their industry will be the first to lose it."

The UK steel sector has been under significant financial strain. The government recently took over the running of Chinese-owned plants in Scunthorpe, and Liberty Steel facilities in Rotherham and Stocksbridge entered government control last month after financial collapse. Those interventions added urgency to talks aimed at reducing US duties that were seen as a potential relief for some exporters.

Officials from both sides have said talks will continue, but senior government sources acknowledged that the timeline for a zero-tariff outcome has lengthened. For UK producers, the delay leaves existing levies in place as they contend with domestic restructuring, investment in new production technologies and a global surplus of low-cost steel that has prompted many countries to impose protective measures.

Trade tensions over steel have been a recurring feature of global commerce in recent years, with tariffs used by several governments to shield vulnerable domestic sectors. The UK government said it would press on with diplomatic and trade engagement with the United States while also considering measures to bolster the competitiveness and resilience of the domestic steel industry.