UK steelmakers say Trump’s tariffs already driving away business

The UK’s two biggest steel companies have said they have already lost customers in the US and are bracing for a flood of cheap imports after Donald Trump imposed steep metals tariffs.

The bosses of Tata Steel and British Steel on Tuesday told MPs on the Commons business and trade committee that customers were looking for alternative suppliers of products to avoid 25% tariffs on steel and aluminium that came into force last week.

Rajesh Nair, chief executive of Tata Steel UK, said: “Customers are already talking to us and wanting to cancel orders, and in some cases are asking us for compensation for potential orders.”

The US president’s tariffs, which apply across the world, will impose an immediate cost on metals imports, but are also expected to push companies who previously sold to the US to look for new markets. That has prompted concerns about a flood of underpriced steel entering the UK from foreign sellers desperate to find buyers to replace previous US orders.

Nair said Tata, which is owned by India’s Tata conglomerate, had experienced “a huge amount of diversion” already, resulting in lower UK prices. While cheaper prices benefit users of steel, they can make it harder for domestic companies to compete if exporters dump steel at artificially low prices.

Allan Bell, chief commercial officer at British Steel, told MPs that preventing trade diversion was the priority. He said he favoured “short-term measures to protect what we have in the country rather than retaliatory measures” against the US, even after tariffs forced British Steel to immediately stop the sale of some products across the Atlantic.

Trump’s tariffs have come with the global steel industry under pressure, after years of turmoil in China’s property industry that has slowed demand. That has forced the Chinese steel industry, by far the world’s largest, to look elsewhere to sell its products.

British executives are particularly concerned because the UK has had an independent trade policy since Brexit. The EU is acting to block diverted steel from its market, but the UK government appears to be acting slower, despite messages of support for the industry from the prime minister, Keir Starmer, and the business secretary, Jonathan Reynolds.

Nair said the apparent mismatch in policies meant that EU steel prices were £60 a tonne higher than UK prices. The British industry already complains of a persistent disadvantage versus the EU because of higher energy prices.

Bell said he “would like to see the pace increase” from the UK government.

Tata Steel was previously the UK’s biggest producer of steel from iron ore, although its steelworks in Port Talbot, south Wales, has stopped production while it replaces polluting blast furnaces with much cleaner electric arc furnaces. Last year Tata cut 2,500 jobs at Port Talbot.

British Steel, which is owned by China’s Jingye, is still operating its blast furnaces in Scunthorpe, Lincolnshire, although it too plans to shift to electric technology.

Alasdair McDiarmid, assistant general secretary of Community, a union representing steelworkers, said the UK needed “a decisive approach to trade defence and a robust UK carbon border adjustment mechanism to be brought in swiftly in line with the EU to protect the country against a flood of dirty steel imports”.