British steel industry needs to clarify the timing of US zero tariffs

At the end of last week, the British steel sector called for clarity on when US steel tariffs will be lifted as part of a trade deal between the parties. This is reported by Reuters.

On May 8, the British government announced an agreement with the United States. As it was said, it was agreed to reduce steel duties to 0% from 25% so that British steelmakers could continue exporting to the United States.

However, details released later indicated that the parties still have to formalize certain requirements and quotas, so industry representatives need clarity on when the duties will be lifted.

According to the document, the United Kingdom will work to promptly meet US requirements regarding the security of the supply chain of steel and aluminum products intended for export to the United States and the nature of ownership of the relevant production facilities.

“Under the understanding that the United Kingdom will comply with these requirements, the United States will immediately establish a Most Favored Nation (MFN) quota for UK steel and aluminum, as well as certain steel and aluminum derivatives,” the agreement states.

Chrysa Glystra, director of trade and economic policy at UK Steel, the industry organization, noted that much has not yet been fully defined in the agreement. According to her, the sector has no idea when it will come into force and what the timeframe will be.

UK Steel welcomed the agreement on May 8, but noted that it is important to consider the indirect impact of US steel tariffs on the rest of the world. This could lead to trade diversion and import pressure on the British market.

The industry association said that it is awaiting further details to find out whether the British government has committed to strengthening the country’s trade protection under this agreement and whether this will lead to a reduction in the share of local steelmakers in the domestic market from the current 35%.

It is also noted that it is extremely important to urgently strengthen protective quotas, as the EU has done, and at the same time develop and implement a reliable trade defense mechanism as soon as possible.

At the same time, Philip C. Bell, President of the Steel Manufacturers Association (SMA), offered his assistance in negotiating alternative options to Section 232 as part of the US-UK agreement, Kallanish reports.

The SMA said in a statement that each country’s situation with regard to Section 232 steel tariffs is different and should be addressed accordingly to ensure fair treatment of the American industry.

Last week, the US and the UK announced a limited bilateral trade agreement between the countries. It leaves in place the overall 10 percent US tariffs on British exports. However, it was agreed to reduce the 25 percent tariff on steel to zero. The duty on car exports for the UK will be reduced from 27.5% to 10%. The reduced rate will apply to 100 thousand British cars.