UK-US tariff deal sparks industry relief—but steel sector still on edge
In what Prime Minister Sir Keir Starmer has hailed as a “historic deal,” a new UK-US tariff agreement officially came into force this week, slashing key import duties and opening up significant opportunities for British car and aerospace manufacturers. But for the UK’s steel industry, the deal brings more anxiety than applause.
While many are celebrating the agreement—signed at the G7 summit in Canada earlier this month—as a major diplomatic and economic breakthrough, industry leaders warn that it leaves one of the UK's most vital manufacturing sectors dangerously exposed. With the deadline for a steel-specific resolution looming just days away, workers and companies in Sheffield, Scunthorpe and Port Talbot are bracing for uncertainty.
Boost for Cars and Aerospace, But a Silence on Steel
The centrepiece of the new agreement is the reduction of US import tariffs on up to 100,000 UK-manufactured vehicles per year. Previously subject to a punishing 27.5% duty, British-made cars will now be charged a 10% tariff—leveling the playing field against international competitors and potentially saving carmakers hundreds of millions annually.
The UK aerospace sector is also celebrating: tariffs have been cut to zero, promising an export boost for firms supplying components and aircraft technology. According to Business and Trade Secretary Jonathan Reynolds, the reductions will “safeguard thousands of jobs and support our vital industries.”
However, glaringly absent from the deal is a concrete resolution on tariffs for steel and aluminium. These products, still facing a 25% levy, could see their duties doubled to 50% if no agreement is reached by the July 9 deadline.
A Sheffield Firm Caught in the Crossfire
Few understand the stakes better than Liam Bates, UK Managing Director of Marcegaglia, a leading Sheffield-based stainless steel manufacturer. Speaking to the BBC’s Today programme, Bates described the uncertainty as a “massive headache,” and warned that a failure to secure a deal could force difficult decisions about future investment and job security.
“Our shipments to the US are already under pressure,” he said. “We’re now facing the impossible task of shipping products worth millions of pounds without knowing whether they’ll be hit with 25% or 50% duty.”
For Marcegaglia, which supplies raw materials from Sheffield to its plant in the US, the issue is more than just numbers. The lead times involved mean that decisions must be made today—even though no one knows what rules will apply next week.
A Trade-Off With Political Cost
In return for lower tariffs on vehicles and aerospace goods, the UK has agreed to scrap tariffs on US beef and ethanol imports. This has not gone down well with everyone.
British bioethanol producers say the deal will make it nearly impossible to compete with heavily subsidised American imports. Up to 1.4 billion litres of US ethanol will now enter the UK tariff-free, removing the previous 19% duty.
Some UK farmers and environmental advocates are also raising concerns about the quality and regulation of imported US beef, much of which is raised using hormone treatments banned in Britain. While government officials insist that certification procedures and border checks will prevent hormone-reared meat from reaching UK shelves, not all are convinced.
An Uneasy Victory
The timing of the deal has also raised eyebrows. Just three days before the agreement came into force, former US President Donald Trump—who still plays a powerful role in US trade policy—indicated he would be unlikely to extend the July 9 deadline for countries seeking steel tariff exemptions. “I don’t think I’ll need to,” he said in a Fox News interview. “I could—no big deal.”
But for many in the UK’s manufacturing heartlands, it is a big deal. The steel sector employs more than 30,000 people directly, with tens of thousands more in supply chains. For communities already hit hard by previous waves of industrial decline, this latest ambiguity feels all too familiar.
Looking Beyond the Headlines
The broader message from this deal is one of economic realignment. As the UK tries to cement post-Brexit trade relationships, the US remains a key partner. But in choosing to prioritise cars and aerospace, the UK may have inadvertently signalled a willingness to leave traditional industries like steel to fend for themselves.
What comes next will depend not only on final negotiations but on how these decisions are perceived at home. With an election on the horizon and growing pressure to demonstrate support for British industry, the government’s handling of the steel issue could shape more than just trade statistics.