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Downing Road has performed down the affect on the British economic system of US tariffs on metal and aluminium, even because the UK’s metal trade warned that President Donald Trump’s proposals can be “devastating”.
A spokesman for Prime Minister Sir Keir Starmer refused to say on Monday whether or not Britain would retaliate towards Trump’s transfer to impose 25 per cent tariffs on all metal and aluminium bought into the US.
“We have not seen the precise details yet, I would not want to get ahead of that,” the spokesman mentioned, including that the US accounted for under 5 per cent of UK metal exports in 2023 and 6 per cent of aluminium exports.
“It’s important to see this in the context of our exports,” he mentioned.
Nonetheless, Downing Road’s try and play down the importance of Trump’s tariff menace was not shared by Britain’s metal trade, which warned that the imposition of US tariffs can be a “devastating blow”.
Though UK metal exports have fallen lately amid a wider trade decline, the US is Britain’s second-largest export market after the EU.
The US accounted for about 165,000 tonnes of Britain’s metal exports in 2023 — about 5 per cent of whole exports however 8 per cent by worth and price near £400mn.
“At a time of shrinking demand and high costs, rising protectionism globally, particularly in the US, will stifle our exports and damage over £400mn worth of the steel sector’s contribution to the UK’s balance of trade,” mentioned Gareth Stace, director-general of commerce physique UK Metal.
In his first time period as US president, Trump imposed a 25 per cent tariff on metal imports and 10 per cent on aluminium, earlier than subsequently granting exemptions to a number of buying and selling companions, together with Canada and Mexico.
The UK exported about 300,000 tonnes of metal to the US in 2017 earlier than Trump imposed tariffs in 2018.
The EU retaliated to the 2018 tariffs by imposing levies on a collection of US imports, together with bourbon whiskey, Harley-Davidson bikes and motor boats. Britain, which was nonetheless part of the EU single market till 2020, additionally imposed these tariffs.
Below a truce brokered by Joe Biden’s administration, the US and the UK agreed a system of tariff price quotas in 2022.
Starmer and his ministers have thus far tried to keep away from the commerce wrath of Trump by holding their heads down, steadfastly refusing to publicly criticise the US president.
Nonetheless ministers have saved in reserve the potential for retaliation within the occasion of tariffs being imposed on the UK, with commerce consultants saying they might mud down the outdated record of EU commerce sanctions.
The Scotch whisky trade would, nonetheless, oppose tariffs being imposed on bourbon, fearing that its personal product may very well be focused by Trump in a tit-for-tat dispute.
Trade consultants mentioned it was not but clear whether or not Trump’s latest bulletins would override the prevailing preparations however warned that they added to common uncertainty at a time when world markets had been flooded with low-cost Chinese language exports.
World extra capability was estimated at 543mn tonnes in 2023 and is forecast to achieve 630mn tonnes by 2026, mentioned UK Metal.
Executives mentioned privately they had been nervous particularly about overseas metal being diverted to the UK on account of the brand new commerce boundaries.
Alasdair McDiarmid, assistant common secretary on the metal union Group, mentioned a “punitive new tariff on UK steel exports would be hugely damaging and threaten jobs”.
“For the US, it would also be self-defeating, as the UK is a leading supplier of specialist steel products required by their defence and aerospace sectors,” he added.
Nadine Bloxsome, chief government of the Aluminium Federation, mentioned information of the tariffs had been “deeply concerning” for aluminium producers.
“At present, the UK exports significant volumes of aluminium to the US, and these proposed tariffs would not only increase costs for UK suppliers but also disrupt long-standing trade relationships,” mentioned Bloxsome.
