As Starmer and Trump agree a trade deal, what about steel?

Times

16 hours ago

The optics of Sir Keir Starmer scrabbling around at President Trump's feet to quite literally pick up the pieces of Britain's trade deal with the United States were far from ideal. But the scene was also a fitting visual metaphor for an agreement that was negotiated in haste and is, even now, still a work in progress.
The good news for the UK is that the executive order signed by Trump on Monday will 'operationalise' parts of the agreement, including reducing the present 27.5 per cent American tariff on cars to 10 per cent for the first 100,000 vehicles shipped from the UK each year.
This will be particularly welcomed by key UK exporters, such as Jaguar Land Rover, for whom the US is a major market. The company had been concerned about delays in implementing the agreement.
The deal will also ensure that UK exports of jet engines and aerospace components to the US are spared from American tariffs. This confirms that the UK will be exempt from any levies emerging from a US national security probe that Trump has launched into the industry.
However, Trump's declaration — 'We just signed it and it's done' — shortly after meeting Starmer, is not entirely accurate. That's because the executive order is silent on tariff-free UK exports of steel and aluminium, an issue agreed in principle last month but not yet implemented.
UK officials said that 'technical and legal' issues were continuing to delay the confirmation of a quota that would allow British exporters to avoid the 25 per cent global steel tariff imposed by Trump on national security grounds.
Industry figures do not expect a deal to be signed until the end of the month at the earliest — and even that timeline is subject to further delay.
There are real concerns that the deal could exclude Tata Steel, Britain's biggest steel manufacturer, which exports more than $100 million worth of goods to the US annually.
That's because the company shut down its blast furnace at Port Talbot last year as part of a three-year transition to a new, greener electric arc furnace at the site.
In the interim, Tata is importing semi-finished steel from its sister companies in India and the Netherlands for finishing in the UK before shipping it to customers — including in the United States.
However, this may fall foul of strict US import rules requiring that all steel be 'melted and poured' in the country of origin to qualify for tariff exemptions — potentially putting it outside the scope of the trade deal.
British negotiators have been pushing for a carve-out for Tata, but the issue remains unresolved — and is the main reason the metals provision was omitted from Trump's executive order.
The UK side remains optimistic a solution will be found. Starmer himself said he was 'really pleased' that the UK was the only country to have secured any kind of trade deal with the US.
Yet the image may still prove prescient: even if the deal is fully implemented, the UK's trading terms with the United States will remain worse than they were before Trump came into office.