UK steel steers clear of US tariff hike, but 50% looms if US steel deal falters

3 June 2025

UK steelmakers have been told that they will temporarily steer clear of President Trump’s 50% steel import tariff having expected to encounter the new hiked-up import tax tomorrow. The 50% tariff being applied to other nations is set to replace the broad brush 25% tariff the President slapped on all steel imports earlier this year, which came into effect on 12 March.

Despite the Prime Minister and President’s Economic Prosperity Deal (EPD) announcements on 8 May suggesting that UK steel imports would no longer face an import charge, the original 25% tariff has remained in place for the UK while officials iron out the detail of the decision. President Trump’s Executive Order today notes that until the deal is complete, UK steel imports will only face 25% tariffs compared to other nations facing the increase. On or after 9 July, the US will likely finalise the agreement to replace tariffs with tariff-free quotas, or choose to pull tariffs up to 50% for the UK.

This is a time-bound vote of confidence for UK steelmaking and our industry’s ability to supply to the US market, but in many ways also creates further uncertainty which is disruptive. The US is the UK’s second most important export market, worth around £400 million and totalling 9% by value of exports, therefore it is critical that the final UK-US steel deal is signed as soon as possible.

Director-General, Gareth Stace, UK Steel, said:

“The President’s decision not to impose a 50% tariff on UK steelmakers, but to keep the rate at 25% while the UK-US deal is completed, is a welcome pause. The Business Secretary, Jonathan Reynolds, recognises that steel trade stability and security between our two nations is of utmost importance and has acted swiftly.

 “Continued 25% tariffs will benefit shipments already on the water that we were concerned would fall under a tax hike. However, uncertainty remains over timings and final tariff rates, and now US customers will be dubious over whether they should even risk making UK orders.

"The US and UK must urgently turn the May deal into reality to remove the tariffs completely. At an already crushing time for our steel industry, with global oversupply and weak demand, we must continue to work together to support sales levels in our second most important export market.

“It is also time for the UK Government to take decisive action domestically on trade defence. There is plain evidence of trade diversion switching gears into the UK after the EU stepped up its trade defences, and now we must do the same. Imports are flooding into the UK market, depressing steel prices and taking away market share. We must not lose sight of our domestic market while battling to stabilise exports to the US.”

Contact details  

Louise Young, Campaigns and Engagement Manager, UK Steel 
07388 370176 | Lyoung@makeuk.org

The US Executive Order: https://www.whitehouse.gov/presidential-actions/2025/06/adjusting-imports-of-aluminum-and-steel-into-the-united-states/ 

• The Executive order notes:
  • “I have further determined that it is necessary and appropriate to allow for the implementation of the U.S.-UK Economic Prosperity Deal of May 8, 2025 (EPD), and to accordingly provide different treatment, as described below, for imports of steel and aluminum articles, and their derivatives, from the United Kingdom.”
  • “Notwithstanding clause 1 of this proclamation, the applicable rates of duty for articles of the United Kingdom that would otherwise be applicable pursuant to Proclamation 9704, as amended; Proclamation 9705, as amended; Proclamation 9980, as amended; Proclamation 10895; and Proclamation 10896 shall remain at 25 percent ad valorem. On or after July 9, 2025, the Secretary may adjust the applicable rates of duty and construct import quotas for steel and aluminum consistent with the terms of the EPD, or he may increase the applicable rates of duty to 50 percent if he determines that the United Kingdom has not complied with relevant aspects of the EPD.”
• UK exports to US: 
  • In 2024, the UK exported 180 thousand tonnes of semi-finished and finished steel to the US, worth £370 million. This accounts for 7% of the UK’s total steel exports by volume and 9% by value.
  • The UK exported 300Kt (£490mn) of steel to the US in 2017 before Section 232 tariffs were imposed in 2018. The UK exported an average of 200Kt (£320mn) over 2018-2021. The UK and the US agreed a system of tariff rate quotas in 2022 seeing exports recover slightly to 235Kt (£517mn). However, the next two years have seen a tough market for steel as a result of high costs and weak demand, which has impacted UK steel production and exports. In 2023, the UK’s steel exports to the US totalled 165Kt (£388mn).
• Global excess capacity:
  • Global excess capacity was estimated at 602Mt in 2024 and is forecasted to reach 721Mt by 2027 – equivalent more than 100x the UK’s production.
  • Capacity expansions in Southeast Asia and the Middle East are continuing at an alarming rate – these are largely state-funded, mostly for high-emission blast furnaces and often do not correspond to domestic demand trends.
  • Steel demand is weakening in key markets, notably China, translating into rising oversupply which is dampening steel prices and spilling over into other markets.
  • Import pressure on the UK market is on the rise amid a weak demand environment. The import share in 2024 already increased to 65% from 60% in 2022. The sharpest import increases came from non-EU sources, mainly India, Vietnam, China, South Korea, Turkey and Algeria. Importantly, these are also countries that have seen significant increases in imports from China or are within China’s top 10 exporting destinations.
  • Over two thirds of steelmaking capacity is in countries that have Net Zero targets later than 2060 or none at all.
• UK Steel safeguards: 
  • Safeguards are a type of trade remedies measure intended to address unexpected surges in imports that are damaging or threatening to damage domestic producers. Safeguards can take various forms but the most common is a tariff-free quota – this allows the continuation of tariff-free imports at the same level or higher as the period before the safeguard was introduced.
  • The UK inherited its steel safeguards from the EU which introduced its own equivalent measure in 2018 principally to guard against import diversion from the US after the introduction of Section 232 tariffs by President Trump. This mechanism expires under WTO rules in June 2026.
  • The UK is only partially shielded from trade diversion expected to occur as a result of President Trump’s new 2025 25% steel tariffs. Steel safeguard quotas have been liberalised every year and are now 22% larger than when they were first introduced in 2018. All while UK demand has contracted by 16%.
  • Even a small proportion of surplus material ending up in the UK would completely overwhelm the UK steel market. Most of these imports will be of high-emission steel.
  • The UK steel safeguards are currently under review - the latest update can be found here.