US Steel and Aluminum Tariffs: A New Blow to UK Manufacturers
Increased steel and aluminum tariffs by Donald Trump: Potential market implications examined
Brace yourselves, UK steel and aluminium manufacturers! The US just upped the ante, with steel tariffs soaring from 25% to a staggering 50% starting this Wednesday (6/4).UK steelmakers are already sweating bullets, fearing cancelled orders that could be in transit as we speak.
The US is the UK's second-biggest market for steel exports, worth £400 million and accounting for 9% of value exports[1]. The aluminum industry isn't off the hook either, with the sector's total contribution estimated around £1.9 billion[2].
Gareth Stace, director general at UK Steel, isn't holding back, "This latest move is yet another body blow for UK steelmakers in this turbulent time."
Despite the US-UK trade deal announced on 5/8, the original 25% tariff remains in place as both trade secretaries, Jonathan Reynolds and Jamie Greer, work out the details for eliminating these tariffs. Car tariffs might also come up in conversation, as the US agreed to decrease them from 25% to 10% for 100,000 cars[1].
Manufacturing industries like steel and aluminium might seem insignificant compared to other sectors, but the tariffs could disrupt their operations. The output for the steel industry was £1.7 billion in 2021, representing 0.1% of the UK's GDP[2]. Aluminum contributed £1.9 billion, according to industry estimates.
However, the car industry might bear the brunt of the impact, given it contributed £21 billion to the UK economy in 2021, equivalent to 0.9% of GDP[1]. The US is the UK's primary car export partner, accounting for 27% of total exports[1].
Car production plunged 16% in April 2022 due to US tariffs, with only 59,200 vehicles produced—the lowest April output figure in more than 70 years, excluding 2020's Covid-19 disruptions[1].
Trade negotiations continue, as the UK government and business leaders push for clarity. A government spokesperson told our website, "We remain committed to protecting British businesses and jobs across key sectors, including steel."
Investors are accustomed to Trump's erratic policy shifts, having coined the TACO trade ("Trump Always Chickens Out") to describe his approach[5]. Stocks took a dip on Monday (6/4) in response to the latest tariff increases, fueled by escalating tensions between the US and China[5].
It remains to be seen whether the tariffs are a permanent setback or just another round in the unpredictable game of international trade. Stay tuned for more updates!
[1]: [Link to original source 1][2]: [Link to original source 2][3]: [Link to original source 3][4]: [Link to original source 4][5]: [Link to original source 5]
- In the wake of rising steel tariffs from the US and ongoing trade tensions, UK manufacturers are bracing for potential disruptions to their personal finance and business operations, especially in the steel and aluminum industries.
- As politics and international trade continue to intertwine, industry leaders and investors increasingly prioritize staying informed on the latest newsletters and updates regarding tariffs, finance, and general-news, as these changes can significantly impact UK businesses.
- Affected sectors like steel and aluminum, while not typically the largest contributors to the UK's GDP, can have far-reaching consequences on personal finance and the overall health of the economy due to their interconnectedness with other industries, such as car manufacturing.
