UK steel exported to the US is currently subject to a 25% tariff, which is lower than the 50% global rate on imports of the metal imposed by Donald Trump in June.
The president granted the UK this partial exemption, external to allow time for implementation of the US-UK trade deal.
UK officials are working with their US counterparts to resolve technical issues that they hope will mean UK firms will be able to export steel to the US up to a certain quota that avoids even this 25% tariff.
Meanwhile, US officials have briefed, external that under the EU-US deal, EU steel will remain subject to the US’s global 50% tariff on metal imports.
That would seem to significantly benefit UK steel exporters relative to their EU counterparts when it comes to selling to the US.
However, the EU Commission president has also suggested, external that Brussels and Washington remain in talks about a quota system, whereby EU steel exports under the quota would also be subject to a lower rate.
That could ultimately erode any relative advantage for UK steel manufacturers.
In theory, EU manufacturers – in steel and other sectors – could move some of their production to the UK to benefit from lower tariffs when exporting to the US
But some analysts are sceptical about the likelihood of this.
“I doubt companies in modern supply chains are going to make big, long-term relocation decisions based on marginal tariff differences,” says David Henig, the UK director of the European Centre For International Political Economy (ECIPE).
“To take advantage of any such tariff differences businesses need to feel reasonably secure that the differences will last. Given the uncertainty surrounding US trade policy, that certainty is currently not there,” agrees Michael Gasiorek.
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