😟 US Steel Import Tariffs

• The US has announced a return to imposing 25% tariffs on steel imports starting March 12, 2025, impacting the UK steel industry which exports about £400 million worth of steel to the US annually.
• The UK government is actively engaging with the steel industry and trade unions to assess the impact of the tariffs and to formulate a response.
• The UK has a comprehensive steel strategy in place, backed by £2.5 billion in public funding, aimed at supporting and revitalizing the industry.
• The government is prepared to work with the US to find mutually beneficial solutions, emphasizing the importance of the UK-US trade relationship, which is worth around £300 billion.
• There are concerns about the potential escalation of trade tensions and the impact on UK jobs and the wider economy. The government is analyzing the situation but has not disclosed specific economic impact details.
• The UK is set to publish a further steel strategy in the spring, addressing not only tariffs but also trade diversion risks and other industry-related issues.
• Discussions with the World Trade Organization (WTO) are ongoing, and the UK supports Ngozi Okonjo-Iweala as the next WTO director general.
• There is political debate over the government’s approach, with some criticism that it has not been proactive enough with the new US administration, while the government highlights its ongoing engagement.
• The government is also considering the broader impact of global trade policies, including the role of the EU’s carbon border adjustment mechanism and maintaining steel safeguards until 2026.

The session on US steel import tariffs showcased a moderate level of disagreement among the members of parliament. While there was a consensus on the importance of the UK steel industry and the potential negative impact of the US tariffs, disagreements arose primarily in the following areas:

1. Government Engagement with the US: Dame Harriett Baldwin criticized the government for not engaging vigorously enough with the US administration, suggesting that Prime Minister’s failure to visit the US soon after the new administration’s inauguration and past diplomatic tensions had jeopardized the relationship. In contrast, Mr. Douglas Alexander defended the government’s approach, mentioning ongoing dialogues and engagements with the US and steel industry representatives.

2. Past Government Policies: There was a clear divide between the parties concerning the past handling of the steel industry. Baldwin implied a lack of success in trade negotiations by the former Conservative government, while Alexander countered this by noting a previous neglect of the steel industry under the Conservative government and highlighted the current government’s initiatives, such as the £2.5 billion commitment towards steel.

3. Economic Strategy and Tariffs: The exchange highlighted differences in views on how to respond economically to the tariffs. For instance, James Wild questioned the government’s complacency and linked the issue to defense spending, whereas Alexander emphasized maintaining a mature dialogue rather than a rapid response.

4. EU Relations: Chris Law from the SNP linked the tariff issue to the broader debate on Brexit, suggesting that rejoining the EU might offer more protection against global economic challenges. Alexander, in response, defended the government’s current EU reset strategy, showing a disagreement on the direction of future EU engagements.

5. Trade Realism vs. Free Trade: The session also revealed a disagreement on trade policy. Nick Timothy advocated for abandoning free trade theories, pushing for a strategy focused on lowering industrial energy costs and protecting domestic production. Alexander responded by rejecting this shift, stating it was the previous government’s failure to deliver trade deals such as the US-UK deal.

Overall, disagreement was evident, but it was balanced with a degree of bipartisan acknowledgment of the steel industry’s value and the seriousness of the situation posed by the US tariffs. This balance contributed to a rating of 3.