Keep knowledgeable with free updates
Merely signal as much as the Commerce disputes myFT Digest — delivered on to your inbox.
The UK authorities is taking a look at hitting totemic American merchandise with tariffs if Britain fails to win a carve out for metal and aluminium from 25 per cent US tariffs.
Jonathan Reynolds, enterprise and commerce secretary, mentioned on Sunday that if US President Donald Trump did impose the hefty import taxes on British metal and aluminium, that would see a return of UK tariffs on US merchandise together with whiskey, denims and motorbikes.
Earlier focused tariffs on US-made merchandise had been suspended underneath a deal agreed in March 2022 by the Conservative authorities with the Biden administration, which noticed the reopening of tariff-free entry for UK metal and aluminium exporters to the US.
Reynolds mentioned that if Trump reimposed the US tariffs, that deal would “fall away”, telling the BBC “we would revert back to that position”.
He insisted that no selections had been taken and he didn’t consider that this might occur. He was hopeful there can be exemptions for UK metal and aluminium exports. “I believe there’s a basis for constructive engagement,” he mentioned.
Reynolds mentioned that the metal the US imported from Britain was “highly specialised” — for instance metal made in Sheffield and utilized by the US Navy for submarine casings — and that there have been no different suppliers.
Douglas Alexander, commerce secretary, has mentioned that British metal exports to the US had been value about £400mn and that tariffs can be a “significant blow”, however Downing Avenue has famous that they amounted solely to about 5 per cent of complete UK metal exports.
Ministers are anxious to keep away from any escalation of a commerce dispute with Washington and are attempting to minimise tensions forward of a go to by Prime Minister Sir Keir Starmer to the White Home later this month.
Starmer will try to influence Trump not solely to exempt UK metal and aluminium from tariffs however to keep away from the appliance of wider commerce sanctions on Britain.
Reynolds rejected Trump’s declare that worth added tax — Britain’s gross sales tax — was a tariff. “I would not see VAT as a tariff,” he mentioned, including that the US additionally had gross sales taxes.
Reynolds’ feedback got here as the federal government introduced ahead a session supposed to safe the long-term way forward for the UK metal business, taking a look at points similar to excessive electrical energy prices, unfair buying and selling practices and scrap metallic recycling.
The Labour manifesto dedicated the federal government to placing as much as £2.5bn in direction of supporting the metal business via the Nationwide Wealth Fund.
Reynolds mentioned the cash can be spent on initiatives that may gave the business a long-term future — similar to electrical arc furnaces. Talks over the way forward for the British Metal plant at Scunthorpe are persevering with.
Reynolds mentioned the “Plan for Steel” session would “examine electricity costs for steel companies” to make the sector internationally aggressive and encourage using domestically-produced metal in tasks similar to a mooted enlargement of Heathrow airport.
