US president Donald Trump sparked fears of a global trade war after he announced his intention to slap hefty across-the-board tariffs on imported steel – a move that would be devastating for the British steel industry.
Unite slammed Trump’s announcement, arguing that tariffs on steel imports would leave US manufacturers without the high-quality UK steel they require and would needlessly jeopardise steel jobs in the UK.
The UK steel industry exports about £360m of its products to the US each year, which accounts for 15 per cent of the sector’s total exports.
Trump justified his decision to impose 25 per cent tariffs on steel imports and 10 per cent tariffs on aluminium imports by saying the move would bring back jobs in both sectors.
“We’re going to build our steel industry back and we’re going to build our [aluminium] industry back,” he said at a White House meeting with US steel industry bosses.
“We’ll be signing [off on the tariffs] next week,” Trump added. “And you’ll have protection for a long time in a while. You’ll have to regrow your industries; that’s all I’m asking.”
But as an independent economics publication Econofact highlighted, any gains in steel jobs in the US would be dwarfed by jobs lost in industries which use steel intensively.
“The number of jobs in U.S. industries that use steel or inputs made of steel outnumber the number of jobs involved in the production of steel by roughly 80 to 1,” Econofact noted. “For this reason, these trade recommendations raise concerns among many manufacturing companies.”
Details of the tariffs are set to be hammered out next week as steel industries in the UK, EU, Canada and others who are close trading partners and allies of the US hope for a special exclusion from the tax.
National security defence?
President Trump invoked a national security defence in order to impose the tariffs under international trade rules allowing them in times of war.
But industry body UK Steel’s head of policy Richard Warren said this defence made no sense for the UK.
“Whilst performed under the guises of national security, whichever way you look at it the UK exports of steel into the US are clearly no threat to US security and pose no threat the health of the US steel sector,” he said. “We are one of its oldest and closest allies.”
Warren warned that the “introduction of blanket measures to restrict the import of all steel imports regardless of their origin” would be “an extremely blunt approach to what is a complex global problem of overcapacity in the steel sector.”
“This requires a coordinated global approach,” he said. “Whilst we all too well understand the frustrations of the US sector, measures such as these smack of short-termism, protectionism and would be rife with unintended consequences for global trade and for the users of steel in the US.
UK government intervention call
Unite national officer for steel Tony Brady explained US tariffs on UK steel would be devastating for the British steel industry and “the thousands of workers who have battled for its survival, alongside their trade unions.”
The news of Trump’s tariffs comes just a year after the UK steel industry has made a slow but steady comeback following a crisis in 2015 that saw thousands of job losses as well as factory shutdowns amid a global glut of steel spurred by Chinese dumping of cheap exports.
This progress may be now be thwarted by Trump’s tariffs, Brady argued as he called on the UK government to intervene.
“The dumping of cheap Chinese steel into the UK took our world class British steel industry to the precipice because of the British government’s inaction,” he said.
“Any tariffs imposed on UK steel by President Trump on a scale that is being mooted would be misguided and deprive US manufacturers of some of the most specialist steel in the world.
“Government ministers and Theresa May must back Britain’s steelworkers and manufacturing communities by securing assurances from President Trump that they will not be caught up in a global tariff war between the US and countries such as China.”