KEIR Starmer has been embarrassed after his much-trumpeted pledge to cut US tariffs on UK steel to zero failed.
Announcing agreements with Donald Trump’s US administration in May, which Labour called at the time the “first US trade deal”, the UK Government claimed that steel tariffs would be cut from 25% to 0%.
A release from Downing Street said: “The UK steel industry – which was on the brink of collapse just weeks ago – will no longer face tariffs thanks to today’s deal. The Prime Minister negotiated the 25% tariff down to zero, meaning UK steelmakers can carry on exporting to the US.”
However, it has now emerged that no such tariff rate was agreed, and the UK will instead seek a guarantee that tariffs will not rise above 25%.
The UK has paused its push to cut the levy to zero in a blow to the sector which is already reeling from major financial difficulties, the FT first reported.
It is understood that Labour could have sought a small tariff-free quota for its steel exports to America as part of ongoing trade talks, but that this would leave the rest exposed to the 50% US global tariff faced by other nations.
The British Chambers of Commerce said the news would “greeted with dismay” by UK industry given the earlier pledge of a 0% rate.
“We urge the Government to continue dialogue with the US to keep the full potential of the trade deal on the table,” William Bain, head of trade policy at the BCC, said.
Gareth Stace, the director-general of industry trade association UK Steel, said: “It will be disappointing if we do not have the tariff-free quota level, but if the US was never offering that deal, then the final decision on 25% offers a degree of certainty and potentially a competitive advantage so long as other countries remain at 50%.
“The US administration has prioritised the reduction of imports over its historic trading relationship with UK steelmakers.
“The reality is that the deluge of heavily subsidised steel flooding into international markets is forcing countries across the world to erect trade barriers to protect their industries.”
He added that it was “even more imperative now” for the UK Government to beef up its own trade defences to ensure British steelmakers “have a sustainable share of their own market”.
“In these market conditions, the last country to protect their industry will be the first to lose it,” Stace said.
The US president had hinted at possible tariff relief for British steel as he boarded Air Force One earlier on Tuesday, but Downing Street would not be drawn on the scope for movement ahead of the two-day stay.
“We’ve made a deal, and it’s a great deal, and I’m into helping them,” he said.
Asked on Tuesday afternoon whether any progress was expected in cutting the levy, the Prime Minister’s official spokesperson said: “There’s a range of things that we’re going to discuss with the president … we’ve obviously got a landmark trade deal.
“[We will] continue to discuss with them how to take that further. But, for obvious reasons, I’m not going to get ahead of those outcomes.”
The LibDems said the Government had “thrown in the towel” to the US president, who “reneged on” the original agreement for US steel tariffs to fall to zero as part of the British-American trade pact.
Deputy party leader Daisy Cooper said: “It looks like the Government has thrown in the towel instead of fighting to stand up for the UK steel industry.
“We were told US tariffs on UK steel would be lifted completely – now that’s turned out to be yet another promise Trump has reneged on.
“It just shows Trump is an unreliable partner and that rewarding a bully only gets you so far.”
The Tories’s shadow business secretary Andrew Griffith said: “On May 8, the Prime Minister claimed credit for negotiating steel tariffs to zero.
“Now it turns out that was untrue and it’s actually 25%. Either his maths or his relationship with the truth clearly needs some work.”
A UK Government spokesperson said: “Thanks to the strength of the UK-US partnership, we are still the only country to benefit from a 25% tariff on steel exports to the US, reinforcing our position as a trusted source of high-quality steel.”
They said Britain was “continuing to work closely with the US to deliver certainty for UK industry, protect skilled jobs and support economic growth.”
