UK steel producers face ‘serious damage’ if US applies 25% Section 232 tariffs
Steel mills in the United Kingdom will be heavily disadvantaged if blanket 25% tariffs are applied to their exports to the United States, Richard Warren, head of policy at industry group UK Steel, said on Friday March 2.
“There is significant apprehension about the indirect effects of these measures in the form of steel trade diverted away from the US to other markets, such as the UK,” Warren said.
“In short, these measures would cause serious damage to the prospects of many steel producers here,” he added.
Under US law, Section 232 allows the country’s president to apply trade sanctions on any imports believed to pose a threat to national security.
Such tariffs have the ability to wreak havoc in other steel markets, with diverted volumes potentially pushing down prices for finished steel from countries such as Turkey and Japan, sources across the globe told Metal Bulletin last week.
US President Donald Trump announced on March 1 that he intends to apply import duties of 25% on all US imports of steel and 10% on aluminium. Two weeks ago, the US Department of Commerce had proposed three possible combinations of tariffs and quotas on imports, to address national security concerns.
For the UK, a blanket 25% tariff would mean that its exports to the US were subject to the same duties as those from large-volume exporters to the country such as Brazil, South Korea and Turkey. That would be a situation which UK Steel would find unacceptable.
“While we still await the precise detail of these measures, and there is still a lingering hope that these tariffs may not target the UK or the EU, President Trump’s comments do indicate the introduction of blanket measures to restrict all steel imports regardless of their origin,” Warren said.
“This would be a unilateral, and extremely blunt, approach to what is a complex global problem of overcapacity in the steel sector,” he added.
Some £360 million-worth ($495 million) of high-value steel products is exported from the UK into the US each year, making up 15% of the European country’s steel exports, according to UK Steel.
“Whichever way you look at it, the UK exports of steel into the US are clearly no threat to US security and pose no threat to the health of the US steel sector,” Warren said.
“We trust that the UK Government would push for and fully support a robust response from the EU,” he added.
The European Commission has pledged “appropriate and swift measures” to counterbalance the US duties should they be applied in a blanket fashion on material of European origins.