Britain's biggest steelmaker warns it faces Trump tariffs hit
The Indian owner of the Port Talbot steelworks has warned that a carve-out from Donald Trump's tariffs is 'critical' to its business.
Tata Steel's UK operations are at risk of falling foul of American import tariffs even if a pending agreement between London and Washington is formalised, because of a reliance on steel made in India and elsewhere.
This is because of American demands that UK steel products can only be exempt from tariffs if they used metal that was 'melted and poured' domestically.
Ministers are trying to secure an exemption for Tata, which is Britain's largest steel producer, but the business otherwise faces being hit by Mr Trump's 50pc tariffs on foreign steel.
The company closed the last blast furnaces at Port Talbot, south Wales, last year and is currently in the process of building an electric arc furnace at the site, which will recycle domestically-sourced scrap metal.
In the meantime, Tata has resorted to importing steel melted in India and Europe for processing into products that are then shipped onwards to America.
The temporary measures mean the company risks running afoul of Mr Trump's 50pc tariffs on foreign steel, which are currently scheduled to be imposed on the UK from July 9.
British steel products already face tariffs of 25pc, like those from much of the rest of the world, but the trade deal in principle struck by Mr Trump and Sir Keir Starmer would see the tax rate fall to zero.
However, despite four weeks of talks, the deal has yet to be implemented. When Mr Trump imposed 50pc steel tariffs on the rest of the world, he gave Britain a reprieve until July 9 – and negotiators are now racing to conclude something before then.
Even this poses a problem for Tata, as the deal's framework stipulates that steel products sent from the UK to the US must use steel that was 'melted and poured' domestically to qualify for tariff relief.
The Government is seeking to obtain a temporary carve-out for Tata and has reportedly said it is confident of success, but the warning from Tata signalled nervousness within the company on Friday.
It is understood that being hit by 50pc tariffs would force Tata to either try to pass some costs on to customers or absorb them itself. If it could not absorb them, production cuts may have to be considered.
Rajesh Nair, the chief executive of Tata Steel UK, said: 'Tata Steel UK will need to import steel substrate until Electric Arc Furnace steelmaking is operational in Port Talbot from late 2027 onwards.
'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.
'We urge the Government to secure a deal as soon as possible, and we would be happy to provide the US government with any needed assurances on the provenance and processing of the steel we supply.'
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