UK rushes to support steel industry amid new US tariffs

 

The UK government has fast-tracked its Plan for Steel Consultation after US President Donald Trump announced a 25% tariff on all steel imports, effective 12 March 2025.

The tariffs have sparked fears within the UK steel sector, which exports significant volumes to the US.

Business Secretary Jonathan Reynolds confirmed a £2.5 billion support package for British steelmakers to counter the potential economic fallout and ensure the sector’s long-term sustainability.

The investment will focus on modernising production through advanced technologies such as electric arc furnaces, reducing energy costs, and improving scrap metal recycling facilities.

“The UK steel industry has a long-term future under this Government,” said Mr Reynolds.

“We are putting the full weight of Whitehall behind the industry to protect jobs, maintain our industrial heritage, and drive economic growth as part of our Plan for Change.”

Tariffs Threaten UK Steel Exports

The US is the second-largest market for British steel, accounting for 209,000 tonnes annually. Industry leaders fear that the 25% tariff will disrupt trade and cost the sector millions in lost revenue.

Gareth Stace, Director-General of UK Steel, warned that immediate government action is critical:
“This plan must be bold and ambitious. We face increasing competition from imports benefiting from more favourable business conditions, and these tariffs only add to that pressure. The government’s commitment is vital to secure a brighter future for our industry.”

Immediate Measures to Support the Industry

In addition to the consultation, the government has simplified public procurement rules to give UK steelmakers a better chance of securing major contracts. A recent deal with Heathrow Airport—requiring 400,000 tonnes of steel—is expected to provide a strong pipeline of business for years to come.

The government also plans to expand the British Industry Supercharger, which will reduce electricity costs for steel firms, bringing prices more in line with international competitors. This move could be key, as UK industrial electricity costs are over 150% higher than the EU median.

Collaboration and Future Strategy

The Plan for Steel will explore ways to expand UK steel production, protect the sector from unfair trading practices, and attract skilled workers.

The government will collaborate with the Steel Council, which will help shape the upcoming Steel Strategy, set to be published in spring 2025.

Jon Bolton, co-chair of the Steel Council, highlighted the importance of stakeholder input:
“Thorough consultation is key. We’ve already held round-table discussions with steel consumers on market dynamics, including the future demand for green steel. I urge all stakeholders to respond to the consultation.”

The consultation will run alongside an independent review by the Materials Processing Institute in Teesside, assessing the UK’s primary steelmaking capabilities and opportunities for growth in green steel production.