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UK industry was on Tuesday exempted from a doubling of US steel and aluminium tariffs by Donald Trump, as British bosses urged Sir Keir Starmer to work quickly to implement a trade pact that would cut the levies to zero.
The surprise move by the Trump administration to hand Britain a carve-out from its latest tariff increases provided some respite for the prime minister, who is facing mounting frustration from industry over delays to implementing the US-UK trade accord.
Announcing the new tariffs via an executive order, Trump said the UK would escape a 50 per cent levy on steel and aluminium “to allow for the implementation of the US-UK Economic Prosperity Deal” — but British metal producers will contend with a 25 per cent tax until the pact takes effect.
Under the terms of the agreement, the UK will receive a zero-tariff quota for steel if it meets US security requirements to exclude China from its supply chains.
However, since the May 8 signing ceremony involving Starmer and Trump, negotiations over implementing the deal have dragged on.
Trump’s executive order added a note of jeopardy to the UK exemption, saying the president reserved the right to increase steel and aluminium tariffs on Britain to 50 per cent if “he determines that the United Kingdom has not complied with relevant aspects” of the trade deal.
The Trump administration’s decision to spare Britain came after UK business secretary Jonathan Reynolds held talks with his US counterpart Jamieson Greer in Paris on Tuesday, in a further effort to expedite the pact.
Reynolds said after the meeting that both sides were working to implement the agreement “as soon as possible” without specifying a timeline.
The UK government said in a statement: “We’re pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs.
“We will continue to work with the US to implement our agreement, which will see the 25 per cent US tariffs on steel removed.”
The trade pact also promised to reduce US tariffs on up to 100,000 British car exports from 25 per cent to 10 per cent.
Before Trump unveiled his executive order, Duncan Edwards, chief executive of BritishAmerican Business, a transatlantic trade body, said it was “very frustrating” from a British point of view that US tariffs on UK steel exports had not yet been cut to zero. Trump imposed 25 per cent tariffs on aluminium and steel imports in March.
Edwards said Starmer had slightly “oversold” the trade pact. “There’s a credibility issue when you say you have done it, but it’s not finished yet,” he added.
UK industry leaders showed growing signs of impatience earlier on Tuesday, telling parliament’s business and trade committee that it was urgent the trade accord was operationalised.
Russell Codling, director of markets business development at Tata Steel, which has steel making operations at Port Talbot in south Wales, said US tariffs of 25 per cent had already a “big impact” on the business, creating “huge levels of uncertainty” for the industry.
“My ‘ask’ is please can the government act as quickly as possible on this,” he told MPs.
The US is the UK’s second most important export market for steel, worth around £400mn a year.
UK carmakers are also in limbo, awaiting details on how they can qualify for a US export quota of 100,000 cars at a reduced 10 per cent tariff, and how it will be shared out.
Murray Paul, public affairs director at Jaguar Land Rover, said the company would continue hurting for as long as the UK government failed to conclude the negotiations on the trade pact.
“It comes down to speed. We are losing business rapidly — a complete cessation of activity with US customers and orders . . . I have confidence [in the deal], but it needs to happen, really, really quickly,” he added.
The hastily agreed trade pact announced by Starmer and Trump had an important disclaimer in the small print: “Both the United States and the United Kingdom recognise that this document does not constitute a legally binding agreement.”
British officials have been working to persuade the Trump administration to bring it into force, but some admitted there was no “clarity” about when this might happen.
The UK made concessions to the US side, agreeing 13,000 tonnes of beef and 1.4bn litres of bioethanol could be exported to the UK tariff free. Bioethanol is used to make the UK’s standard E10 petrol less carbon intensive.