Government promises ‘robust’ defence of steel industry amid fears of trade war

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Downing Street has promised to “robustly” defend the UK steel industry, after US President Donald Trump confirmed plans for a 25% tariff on imports.

International Trade Secretary Liam Fox, who is to visit Washington next week to seek further detail on the planned levies, said it would be “absurd” for the UK to be included in Mr Trump’s tariffs.

But even if an exemption was offered to the UK, it was unclear whether it could be accepted while Britain remains a member of the EU unless it applied to the whole 28-nation bloc.

The tariff – which Mr Trump said was aimed at protecting national security and American jobs – could trigger a full-blown trade war if the European Union responds with countermeasures.

Trade body UK Steel said the tariffs could have a “profound and detrimental impact”, while the Community union demanded action to protect British jobs and avoid a “global trade war”.

Responding to Mr Trump’s move, a Number 10 spokesman said: “Tariffs are not the right way to address the global problem of over-capacity. That requires a multilateral solution.

“We will work with EU partners to consider the scope for exemptions and continue to work with all sectors involved in this to robustly defend the interests of our industry.

“Liam Fox is travelling to the US next week to get more detail. The important part of this process is to get that detail and then consider the next steps.”

Pressed over whether EU rules could block the UK from benefiting from a bilateral exemption while it remains a member, the Downing Street spokesman said: “We want to work with our partners to consider the scope for exemptions.

“Obviously we remain a full member of the EU and that’s why we’re going to work with our EU partners.”

Speaking in the White House with a group of workers, Mr Trump confirmed the levy on steel imports and a 10% tariff on aluminium in response to an “assault on our country” from cheap overseas metal.

There would be exemptions for North America Free Trade Agreement (Nafta) states Mexico and Canada, and Mr Trump said other countries may be able to negotiate to avoid the tariffs.

Mr Trump said if his goals could be accomplished “by other means” the US will remain “open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security”.

Donald Trump holds up a proclamation on steel imports (Susan Walsh/AP)
Donald Trump holds up a proclamation on steel imports (Susan Walsh/AP)

He said the UK produces “very high-value steel, some of which can’t be sourced in the United States and will simply push up the price of steel there.

“We also make steel for the American military programme so it’s doubly absurd that we should then be caught on an investigation on national security.

“So our view is yes, we can deal multilaterally with the overproduction of steel, but this is the wrong way to go about it.”

UK Steel’s director Gareth Stace said the tariffs “would have a profound and detrimental impact on the UK steel sector, which exported some 350,000 tonnes of products to the US in 2017, over 7% of its total exports.

“The UK sector is in the midst of a fragile recovery following years of considerable turmoil, it would be utterly devastating if this were to be undermined.”

He said it was “vital” the EU and UK worked with the US administration on exemptions to the tariff.

But the industry also fears the indirect consequences of Mr Trump’s actions, which could lead to cheap Chinese steel being dumped on European markets instead of sold to the USA.

Roy Rickhuss, general secretary of steelworkers’ union Community, said: “Donald Trump’s short-sighted strategy will put jobs at risk on both sides of the Atlantic.

“It is now more important than ever that Theresa May and Liam Fox use every bit of influence they have left in America to protect the jobs of British steelworkers.”

The EU’s trade commissioner Cecilia Malmstrom said the bloc should be excluded from the measures and she would meet US trade representative Robert Lighthizer to discuss the situation on Saturday.

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