Donald Trump’s “unjustifiable” trade tariffs have the potential to torpedo British industry and trigger unprecedented chaos across America and the world, experts warn.
UK businesses at the mercy of his war on metal are working around the clock in the search for a breakthrough after a decision to slap 25% tariffs on all steel and aluminium imports into the US.
Tariffs are a key part of a White House vision to boost US manufacturing and protect jobs, but experts say they will inflate prices for consumers.
And the US president has been left in no uncertain terms as to the reception he will receive when he makes his state visit to the UK later this year.
Steve Morley, president of the Confederation of British Metalforming, said: “We strongly oppose the unjustified US tariffs on steel, aluminium, and their derivative products, imposed under President Trump’s administration.
“These tariffs will unquestionably injure UK exporters, including our members, disrupt global trade conditions and also increase costs for American businesses and consumers.”
Latest data show that UK steel exports to the US are worth approximately £400million, making the US the UK’s second-largest export market for steel after the EU.
The Trump-initiated tariff war is set to have widespread and potentially devastating consequences on manufacturers and consumers in the US as steel and aluminium are crucial in the making of home appliances, cars, planes, phones and buildings.
Steel is a backbone material for construction, manufacturing, transport, and energy, with the construction sector using one-third of all steel imports. It will push up costs for infrastructure projects, including airports, schools and roads.
Lightweight and corrosion-resistant aluminium, is essential for the car and aerospace industries, as well as food and drink packaging. The US is particularly dependent on aluminium imports, with roughly half of the metal used in the country coming from foreign sources.
Dr David Crosthwaite, chief economist at the Building Cost Information Service, said: “A 25% tariff on steel imports would undoubtedly reduce exports to the US, potentially increasing domestic supply. This could, in the short term, lead to price decreases unless UK producers can find alternative markets to absorb the excess.
“At the same time, the UK has seen a significant increase in steel imports from countries like China, India and Vietnam, and this influx – with other countries affected by the tariffs too – may force domestic producers to lower prices to remain competitive. While buyers, such as those in the construction industry, would benefit from lower prices in the short term, this situation is only sustainable if UK producers can withstand the intensified competition.
“In periods of weak global demand, UK producers may be compelled to accept lower prices in both domestic and international markets to maintain sales volumes. To mitigate losses from decreased prices and sales, UK producers may reduce production, leading to a diminished domestic supply over time.”
Bridgnorth Aluminium operates the only fully integrated aluminium coil rolling plant in the UK, employing 330 people and selling 20% of what it makes into America.
Boss Adrian Musgrave said: “These tariffs add another dimension to the global uncertainty we are all currently dealing with.
“If there is no movement on the 25% rate it will make trading with the US more difficult for us as a business, but it could also cause supply and cost issues for firms in America too.
“For example, for a significant portion of our US sales, there is currently no US producer. This means there is no threat to domestic aluminium production, yet companies using our aluminium may soon be hit by rising costs.
“What would we like to see? A deal between the UK and the US that removes tariffs all together or significantly reduces it from the 25% rate. This is something we are championing with the Department for Business and Trade and manufacturing bodies, such as the Aluminium Federation, CBM and Make UK.”