British Government Announces £2.5 Billion Support Package for Steel Industry Amid US Tariffs
London, February 16, 2023 – The British government unveiled a £2.5 billion (3 billion euros) support plan on Sunday, February 16, to safeguard its steel industry in the face of looming US tariffs.
The Labour administration under Prime Minister Keir Starmer also launched a consultation aimed at "protecting the steel sector from unfair trading practices abroad" and mitigating high electricity costs.
"The UK steel industry has a long-term future under this government," Business and Trade Secretary Jonathan Reynolds said in a statement. The announcement came after US President Donald Trump announced on February 10 that the US would impose 25% tariffs on steel and aluminum imports from March 12.
Canada, Mexico, and Brazil are among the largest steel exporters to the US, followed by South Korea. The UK exports roughly 10% of its steel to the US, amounting to approximately £400 million in 2023.
The UK Steel trade association called the US plan a "devastating blow." The Starmer government stated that it was "working" with the US on "the detail" of the tariffs that Trump intends to impose, a response that contrasts with the European Union and Canada’s vow to provide a "firm" response to the US president.
Support Measures
The government’s support package includes:
- Up to £2.5 billion in loans and grants to help steel companies adapt to the new tariffs and invest in new technology.
- A reduction in electricity costs for the industry by £129 million over the next three years.
- Measures to protect the industry from unfair trade practices, such as dumping and subsidies.
- A review of the steel sector’s competitiveness to identify areas for further support.
Consultation on Unfair Trading Practices
The consultation on unfair trading practices will consider measures to:
- Prevent the dumping of cheap steel into the UK market.
- Counteract subsidies from foreign governments that distort competition.
- Address the use of forced labor in steel production.
Industry Response
The UK Steel trade association welcomed the government’s support but called for urgent action. "The proposed package of measures is a step in the right direction, but we need to see the detail and swift implementation," said Chief Executive Gareth Stace. "The clock is ticking, and we cannot afford to wait."
The Community trade union also welcomed the support but emphasized the need for long-term investment. "We need to secure a sustainable future for our steel industry," said General Secretary Roy Rickhuss. "This means investing in jobs, skills, and technology."
Government’s Role
The government’s response to the US tariffs highlights its commitment to supporting the UK’s steel industry. The industry employs approximately 33,000 people and supports a supply chain of around 60,000 jobs across the country.
By providing financial assistance, addressing unfair trade practices, and reducing electricity costs, the government aims to create a competitive environment for the UK steel industry to thrive. The outcome of the ongoing consultation and the government’s continued engagement with the US will shape the future of the UK steel sector.
