LONDON — The UK’s two largest steel producers have raised alarms over the impact of President Donald Trump’s recently imposed tariffs on metals, revealing that they are already losing US customers and facing the threat of a surge in low-cost imports into the UK.
Executives from Tata Steel and British Steel told members of the UK Parliament’s Business and Trade Committee on Tuesday that the 25% tariffs on steel and aluminium, which came into effect last week, have caused significant disruptions. Customers are increasingly seeking alternative suppliers to avoid the added costs, while some have even requested compensation for orders that could now be subject to hefty tariffs.
Rajesh Nair, CEO of Tata Steel UK, described how the company was already seeing cancellations and potential order modifications as customers explored other sources. “Customers are already talking to us about canceling orders, and in some cases, they’re asking us for compensation for potential orders,” Nair explained.
The US tariffs, which apply to all countries globally, are not only raising the cost of steel and aluminium imports but also encouraging companies that traditionally supplied the US to look for new markets. This shift has raised concerns about a flood of underpriced steel entering the UK, as foreign exporters seek to offload stock that would have been sold to American buyers.
Nair noted that Tata Steel had already seen “a huge amount of diversion” of steel products, resulting in lower prices in the UK. While this may benefit some users of steel, it poses a serious challenge for domestic producers, who are at risk of competing with steel dumped at artificially low prices by foreign suppliers.
Allan Bell, Chief Commercial Officer at British Steel, also testified before MPs, stressing that protecting the domestic market from trade diversion was a top priority. Bell expressed a preference for “short-term measures to protect what we have in the country,” rather than retaliatory actions against the US. British Steel had already ceased selling certain products to the US due to the tariffs.
The new tariffs have come at a time when the global steel industry is already under pressure, with China’s sluggish property sector dampening demand. As a result, Chinese steelmakers — the largest producers in the world — are increasingly seeking new markets for their surplus products, exacerbating concerns about a glut of cheap steel entering international markets.
UK steel industry leaders are particularly concerned due to the country’s post-Brexit trade policy. While the EU has taken action to block diverted steel from its markets, the UK government has been criticized for its slower response, despite vocal support for the industry from Prime Minister Keir Starmer and Business Secretary Jonathan Reynolds.
Nair pointed out the disparity in steel prices between the UK and the EU, with the latter’s prices being £60 per tonne higher, exacerbating the UK’s competitive disadvantage due to higher energy costs. Bell echoed this sentiment, calling for a quicker response from the UK government to protect domestic producers.
Tata Steel, which previously was the UK’s largest steel producer, has paused production at its Port Talbot site in South Wales as it transitions from polluting blast furnaces to more environmentally friendly electric arc furnaces. The company also laid off 2,500 workers at Port Talbot last year. Meanwhile, British Steel, owned by China’s Jingye Group, continues to operate its blast furnaces in Scunthorpe, although it too is planning a shift to electric technology.
Alasdair McDiarmid, assistant general secretary of the Community trade union, called for urgent action from the UK government. He emphasized the need for “a decisive approach to trade defence” and the swift implementation of a UK carbon border adjustment mechanism to shield the country from the influx of lower-quality, potentially polluting steel imports.
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