Tata Steel may be left out of the UK-US trade deal

The UK government is working to prevent the country’s largest steel producer, Tata Steel, from being deprived of duty-free access to the US market under the trade deal between Kier Starmer and Donald Trump. This was reported by The Guardian.

British Prime Minister Keir Starmer said last week that he hoped his agreement with the United States, which had been agreed but not signed, would come into force in just a couple of weeks. On June 4, Donald Trump raised duties on steel and aluminum imports to the United States from 25% to 50%. Duties on metals imported from the UK will remain at the previous level of 25%, with possible changes or quotas starting on July 9, depending on the status of the agreement between the parties.

However, Indian Tata Steel, which operates a steel mill in Port Talbot, may be excluded from the deal, according to company executives, because of the origin of some of its products. The company annually exports more than $100 million worth of goods to the US market.

In October 2024, Tata Steel shut down the last blast furnace at the plant due to the planned transition to EAF. The company is currently importing steel from its subsidiaries in India and Europe for processing at Port Talbot to ship to customers. This fact may violate American requirements – Washington insists that the steel be “smelted and cast” domestically to qualify for tariff exemptions.

The British side has been trying to secure an exemption for Tata, a government source said, and is confident that an agreement can be reached that will protect the company. However, the insider noted that the negotiations were “difficult.”

The UK has also been under pressure from the US regarding British Steel, which is owned by the Chinese Jingye Group, the newspaper notes. The government has used emergency legislation to take control of the Scunthorpe plant. However, Americans are concerned that China’s involvement in British Steel could allow Beijing to use the company as a “back door” to the United States for Chinese products.

It should be noted that Tata Steel will start implementing its state-of-the-art electric arc furnace project in Port Talbot in July 2025, with production expected to begin by 2027. In its annual report for fiscal year 2024/2025, the company confirmed that key permits for the project have now been received.

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

However, details that were released later indicated that the parties still have to formalize certain requirements and quotas. Industry representatives have called for clarity on when the duties will be canceled.

In particular, as stated in the document, the United Kingdom will work to promptly meet the United States’ requirements regarding the security of the supply chain of steel and aluminum products intended for export to the US market and the nature of ownership of the relevant production facilities.