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Sir Keir Starmer is not going to impose instant counter-tariffs towards Washington if Donald Trump hits Britain on Wednesday together with his 25 per cent international levy on metal and aluminium imports to the US.
Downing Road mentioned the UK premier would take a “cool-headed” strategy as he tries to maintain Britain out of any wider transatlantic commerce struggle. “You received’t get instant counter-tariffs,” mentioned one UK official.
Starmer urged the US president on Monday in a telephone name to not goal British metal and aluminium makers, however is braced for the primary Trump tariffs to be imposed on the UK within the early hours of Wednesday.
The prime minister has pinned his hopes on Trump exempting the UK from wider tariffs as a part of a doable US-UK financial deal — initially centered on know-how — mentioned by the 2 leaders within the White Home final month.
The US accounted for about 182,000 tonnes of Britain’s metal exports in 2024 — about 7 per cent of complete exports however 9 per cent by worth and value greater than £400mn.
Allies of Jonathan Reynolds, enterprise and commerce secretary, mentioned the minister will stress the federal government help already being given to the UK metal business as he makes an attempt to keep away from inflaming commerce relations with Washington.
Reynolds’ colleagues say the minister might situation some form of response if the US metal tariffs are utilized, but it surely is not going to embrace a right away wave of counter-tariffs of the kind seen throughout Trump’s first time period in workplace. Officers declined to say what it’d embrace.
In 2018 Britain, which was then a part of the EU, levied tariffs on iconic US merchandise resembling bikes, whiskey and denims after Trump imposed tariffs of 25 per cent on metal and 10 per cent on aluminium from most nations.
These tariffs have been suspended in March 2022 beneath a take care of the Biden administration and changed by a tariff-rate quota system, permitting 500,000 tonnes of UK metal to enter the US yearly with out incurring duties.
Reynolds told the Financial Times in Tokyo final week that he would “arise” for the British metal business and that retaliatory measures “exist already”, as he tried to exert stress on the US administration to not hit the UK with metal tariffs.
However the UK place has softened as officers in Whitehall took the view that Trump was decided to press forward. Ministers have reserved the correct to reactivate the suspended tariffs.
British officers careworn that solely 5 per cent of metal manufacturing by quantity goes to the US, a lot of it extremely specialised. For instance, metal made in Sheffield is utilized by the US Navy for submarine casings.
Reynolds, who is predicted to provide a press release to MPs on Wednesday if the US tariffs are imposed, may also observe that the federal government has dedicated as much as £2.5bn to rebuild the metal sector, British officers mentioned.
He’ll level to a brand new scheme capping vitality prices for industries resembling metal that comes into pressure subsequent month, which might minimize the electrical energy prices of vitality intensive sectors resembling metal by between £320mn and £410mn this 12 months.
British metal exports have fallen lately amid a wider business decline however the US is the UK’s second-largest export market after the EU.
Britain’s metal business has warned that the US tariffs might deal a “devastating blow” to the sector at a time of shrinking demand and excessive prices.
Chrysa Glystra, director for commerce and financial coverage at UK Metal, the commerce foyer group, mentioned on Tuesday that it was “disappointing” that the UK authorities had to date not secured any exemptions to the incoming tariffs though the business was aware of the hassle made by ministers.
Some UK producers, mentioned Glystra, have been already seeing their “business place within the US being challenged”, with anecdotal studies that US clients had paused further orders given the uncertainty over the tariff state of affairs.
Nadine Bloxsome, chief govt of the Aluminium Federation, mentioned UK producers have been already reporting “early indicators of enterprise uncertainty”.
The priority, she mentioned, was not nearly “instant lack of contracts however the longer-term danger of commerce diversion, the place supplies initially destined for the US are redirected into various markets, together with the UK”.
The US accounted for about 10 per cent of exports of aluminium by quantity final 12 months, value round £225mn.
