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Tata Steel has warned that it could be excluded from tariff-free access to the US under the UK’s trade agreement with Washington, putting more than £150mn worth of annual exports at risk.
Britain’s largest steel producer, which owns the vast Port Talbot site in south Wales, fears that under the agreement announced between the UK and the US last month it will no longer be able to export to America because of the origin of some of its products.
After closing its two blast furnaces at Port Talbot last year Tata has been importing steel from its sister plants in India and the Netherlands for processing in the UK to then ship to customers. However, this could breach US import rules that require all steel to be “melted and poured” in the country from which it is imported.
Earlier this week US President Donald Trump exempted British steelmakers from a doubling of US steel and aluminium tariffs from 25 per cent to 50 per cent. Last month’s US-UK trade pact promised to lower these tariffs to zero, but it has not yet been agreed when this will take effect, leaving the industry in limbo. Exact details of the deal are also not yet finalised.
Rajesh Nair, chief executive of Tata Steel UK, said in a statement on Friday that his company was urging the government to “secure a deal as soon as possible”.
He said Tata would need to keep importing steel until its new electric arc furnace is operational from late 2027. It is therefore “critical for our business that melted and poured in the UK is not a requirement to access the steel quotas in any future trade deal”.
“Even though we are not currently melting steel in the UK, we remain the largest steel producer in the country and our mills continue to transform imported steel coil and slab into high-value, specialist products which are not available from US producers and are therefore essential to our US customers,” he said.
Tata has been warning ministers about the risks to its business for several weeks, according to people familiar with the situation. The company exports more than £150mn worth of steel to the US every year, including for packaging products.
UK negotiators have been trying to secure a carve-out for Tata. One government official said the US talks were ongoing, adding that the UK was confident that all British steel producers — including Tata — would “feel the benefit of the deal.”
The US is the UK’s second-most important export market for steel after the EU, worth about £400mn a year.
British officials are also under pressure from Washington to ensure no Chinese steel enters the US via the UK, given the Chinese ownership of British Steel. The UK government seized control of Britain’s second-biggest steel producer in April.
The government has defended its trade agreement with Trump. The UK, said a government spokesperson, was the “first — and currently the only — country to secure a trade deal with the US last month and we remain committed to protecting British business and jobs across key sectors, including steel, as part of our plan for change”.
The government would “continue to work with the US to implement our agreement, which will see the 25 per cent US tariffs on steel removed”.
