US spares UK from 50% steel tariffs, gives five weeks to finalise deal

The UK has secured a five-week reprieve from steep US steel and aluminium tariffs under a deal between President Donald Trump and Prime Minister Keir Starmer, however, higher levies remain a risk if conditions aren't met.

The White House this week implemented a new 50% tariff rate on metal imports, but the UK has been temporarily exempted while negotiations continue, Caliber.Az reports, citing American media.

The exemption stems from a bilateral agreement announced in May, but the US has made it clear that British exports could still be hit if the UK fails to comply with the terms.

That leaves the Starmer government under pressure to resolve outstanding issues, particularly the removal of the existing 25% tariff on steel, a key component of the deal signed last month. UK negotiators had hoped to secure a firm timetable for implementing tariff relief, but the latest US proclamation keeps the option of punitive measures on the table.

“We’re pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs,” the government said in a statement on June 4. “We will continue to work with the US to implement our agreement, which will see the 25% US tariffs on steel removed.”

The British steel industry has welcomed the temporary relief, but warns that continued uncertainty could jeopardise the future of UK steelmakers. Industry representatives say the sector is already facing severe headwinds, including weak global demand, falling prices, and chronic overcapacity.

“The longer these tariffs remain in place, the more pressure mounts on UK producers,” said Gareth Stace, Director General of UK Steel. “This morning, we do breathe a temporary sigh of relief that we’re only paying the 25% tariff, not the 50%. But what we really want is for those tariffs to be removed entirely — as agreed by the Prime Minister and the President.”

Business Secretary Jonathan Reynolds met US Trade Representative Jamieson Greer in Paris late June 3 in a bid to accelerate progress. According to Reynolds’s department, the two sides discussed “implementing agreements on sectoral tariffs as soon as possible” and agreed that both businesses and consumers needed to “start to feel the benefits of the deal soon.”

Britain exports roughly 200,000 metric tonnes of steel to the United States each year, valued at more than £400 million ($532 million). Under the agreement struck in May, the UK said US tariffs on steel and aluminium would be reduced to zero, while car tariffs would drop to 10%. In return, Britain pledged to streamline customs for US products and ease trade barriers on a wide range of American goods, from beef to ethanol.

One of the remaining stumbling blocks is the US concern over the Chinese ownership of British Steel. The UK took de facto control of the company in April to prevent the closure of its two blast furnaces, though formal ownership still resides with China’s Jingye Group. The Biden administration has insisted that full tariff relief depends on resolving this issue.

The Starmer government has signalled that nationalisation remains a likely short-term solution, but has been cautious due to the company’s heavy losses, reportedly around £700,000 ($930,000) per day. Analysts say the new US tariff threat could force Downing Street to speed up efforts to find a long-term buyer or restructure the firm.

Despite the reprieve, questions remain over whether the UK’s decision to be the first to strike a metals deal with Trump will pay off. The Prime Minister’s Office hailed the May agreement as a vital move to protect a key industry, it said was “on the brink of collapse.” Whether that promise is fulfilled now depends on how swiftly both governments can implement the finer points of the deal.

By Aghakazim Guliyev