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The latest trade tariffs enacted by Donald Trump’s administration will now see UK industries further affected, after a global 25 per cent addition was placed on all steel and aluminium imports into the United States.
With the UK government suggesting about five per cent of UK steel exports and six per cent of aluminium by volume go to the US, there will clearly be an impact on businesses operating on this side of the Atlantic from the latest in an escalating trade war – and UK organisations in both industries claim those are underestimates of the actual scale of shipments.
Exchequer secretary to the Treasury, James Murray, said the UK would not “retaliate immediately” while the EU announced counter-measures. Mr Murray said the tariffs were “disappointing” but added: “We’re already negotiating rapidly toward an economic agreement with the US, with the potential to eliminate additional tariffs.
“The UK and the US have been negotiating rapidly for an economic agreement, and so we’re in a position where that negotiation is ongoing and these global tariffs, if you like, have landed in the middle of that work. So we don’t want to be pushed off course by this. We want to carry on with our rapid negotiation toward an economic agreement, because we think that’s in the best interest of British businesses and the British public.”
However, there could be both immediate and longer-term impacts from the trade tariffs in these industries, which affect people in the UK in terms of jobs and potential prices. Below, The Independent outlines what these effects could be.
Business costs on the rise
William Bain, British Chambers of Commerce (BCC) head of trade policy, called for talks to continue over a positive outcome and said retaliatory tariffs should only be used as “a means of last resort”.
He said discussing win-win scenarios should be the priority right now as businesses in both nations seek to keep trading with each other in a “new age of uncertainty”, while explaining prices would “inevitably” rise.
“Products made with UK steel and aluminium play an important part in many supply chains in the US. Both sides will now be facing up to negotiations on how the burden of these new tariffs will affect businesses in both countries,” he said.
“Despite this action, UK firms will want to keep trading with their customers and clients in the US and vice versa. Our commercial, investment and trading relationships remain strong.
“Tariffs mean prices and costs will inevitably go up and this is a lose-lose scenario for consumers, businesses, and economic growth. More tariffs are also on the agenda for the start of next month which will add fresh uncertainty into the mix.
“Businesses will be looking to the UK government to continue dialogue, with the US, to resolve this situation and restore certainty for firms, which has been badly lacking over recent weeks. Against this background, a series of tit-for-tat tariffs could easily spiral into an all-out trade war and would do the UK little benefit.”
John Foster, chief policy officer at the Confederation of British Industry (CBI), called for bodies and businesses to start working together.
“At a moment in the economic cycle when boosting business confidence and unlocking firms’ capacity for investment holds the key to kickstarting economic growth, the escalating tariff situation in the US remains deeply concerning,” he said.
“Rather than heeding the siren calls of protectionism, major global players should be leaning into the significant economic benefits that free, fair and open trade can bring. The CBI encourages all sides to come to a negotiated solution […] and work together to tackle shared global challenges.”
How it’s affecting the public’s pocket
From a wider-lens perspective, the constant shifting mood from tariffs being announced or altered means investors have struggled to keep pace – meaning a risk-off approach takes precedence. Shares are sold and markets in which peoples’ pensions may be invested have plummeted as a result.
“The winds keep blowing in different directions on tariffs that it is impossible for markets to establish the lay of the land,” said AJ Bell investment director Russ Mould. “Donald Trump keeps moving the goal post and investors are getting fed up. Metal tariffs are today’s special on the menu and they’ve been a major catalyst for many of America’s trading partners to retaliate with tariffs on other goods.
“Trump is essentially sticking with the same message: tariffs make goods imported into the US more expensive and that will drive Americans to buy more goods domestically.
“Critics say it’s not that simple and that tariffs will ultimately raise prices for consumers and businesses in the US and hurt the economy.”
There has been the suggestion that jobs and planned exports could already have felt the impact of tariffs, with Nadine Bloxsome, chief executive of trade body the Aluminium Federation (Alfed), noting that “reduced US orders” are already a factor.
“We are concerned that, without proactive safeguarding, the UK could face an influx of low-cost imports, threatening the competitiveness and stability of our domestic market,” Ms Bloxsome added.
Businesses should plan for the future
Will Trustram, partner at global law firm Clyde and Co, commented there could be “heightened risk of defaults and non-performance under contracts due to increased costs and market disruptions [which] could lead to a surge in commercial disputes”.
“These tariffs not only increase costs directly but also create broader market uncertainties that can disrupt supply chains and lead to unforeseen financial and legal risks,” Mr Trustram added.
“UK companies must consider proactively managing their exposure by incorporating robust contractual protections, such as well-drafted Force Majeure or Material Adverse Change clauses, to mitigate the impact of these tariffs and ensure business continuity in an increasingly volatile trading environment.”
In mitigation, domestically at least, the joint managing director of the Sizewell C nuclear plant, Julia Pyke, said the company was still committed to buying steel from UK producers.
She said the UK’s domestic steel industry is “critical for energy security, infrastructure, and net zero” and that the project “remains committed to maximising UK steel throughout our construction plans, including a £700m steel pipeline over the next decade”.
“Sizewell C will be one of the biggest buyers of British steel in the coming years, securing thousands of homegrown jobs and strengthening domestic manufacturing at this critical time,” Ms Pyke added.