Keir Starmer is under pressure to strike a trade deal with the US after Washington signaled that Australia could be exempted from steel tariffs hike.
The move has triggered alarm across the UK’s struggling steel sector, with industry leaders warning of dire consequences. On Monday, President Trump announced a global 25% tariff on steel imports, a decision he hailed as “the beginning of making America rich again.”
However, the US leader also hinted that Australia could be spared, citing the country’s trade surplus with the United States. In a statement that raised concerns in Britain, he remarked, “We have a huge deficit with the UK,” a reference largely linked to services rather than goods.
Australia has been lobbying aggressively for special treatment, with its trade minister arguing that the country’s steel and aluminum exports help create “good-paying American jobs” and are vital to shared defense interests.
Rachel Reeves, the UK’s Chancellor, has said she and Prime Minister Starmer will push for Britain to be granted similar exemptions. “There is a deal to be done,” she insisted, highlighting that unlike many other countries, the UK does not run a trade surplus with the US.
Peter Mandelson, Britain’s newly appointed ambassador to Washington, has urged caution, advising against “overreacting.” He suggested that the tariffs may not be specifically aimed at the UK.
Unlike the European Union, which is preparing retaliatory measures, the UK government appears reluctant to escalate tensions by imposing counter-tariffs. However, concerns are growing that a trade war could flood the UK market with cheaper imports, jeopardizing British steel suppliers.
The UK’s steel sector has sounded the alarm, warning that failure to secure an exemption could be catastrophic. Britain exported 166,433 tonnes of steel to the US in 2023, making it the second-largest overseas market for UK steel after the EU. However, steel sales to the US accounted for just 5% of Britain’s total exports last year.
UK Steel director general Gareth Stace expressed deep concern over the situation. “It is deeply disappointing if President Trump sees the need to target UK steel, given our relatively small production volumes compared to major steel nations,” he said.
He emphasized the importance of Britain’s steel exports, which are used in critical sectors such as defense, aerospace, and manufacturing.
“The UK produces world-leading steel, supplying the US with high-quality products for defense, aerospace, stainless, and other critical sectors, materials that simply cannot be replicated elsewhere.”
Gareth Stace
Starmer’s Diplomatic Challenge Amid Steel Tariffs Hike
Australian Prime Minister Anthony Albanese has already taken decisive action, revealing that he had a “constructive” call with President Trump.
“I presented Australia’s case for an exemption, and we agreed on wording to say publicly which is that the US president agreed that an exemption was under consideration.”
Prime Minister Anthony Albanese
Lord Mandelson has acknowledged the growing concerns within the UK over the prospect of tariffs but believes diplomatic efforts could yield results. He noted that Starmer’s government must “make our views known privately and directly.”
The UK’s top diplomat in Washington further stressed the importance of pragmatism, stating that while Britain may not agree with all of President Trump’s policies, it must “respect and understand what drives him” and work to adjust where necessary.
The UK government is awaiting further details on the tariff policy before formulating its next steps. However, industry leaders and trade unions are urging immediate action, warning that thousands of jobs in Britain’s already struggling steel sector could be at risk.
As the US moves forward with its trade policy, all eyes will be on Starmer’s ability to navigate this diplomatic minefield and secure a deal that safeguards the future of UK steel.
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