Steel being processed at the Forgemasters Works in SheffieldImage copyright
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US firms importing steel from the UK will have to pay an additional 25% tax

New tariffs imposed by the US on steel and aluminium from the EU are “illegal”, the UK’s International Trade Secretary Liam Fox has said.

The policy came into force on Friday, meaning anyone in the US importing the metals from the EU will have to pay an additional tax.

President Donald Trump said the move would protect US national security.

Dr Fox said Prime Minister Theresa May would be raising the issue at the G7 leaders meeting next week.

On Friday, Mrs May said she was “disappointed” at the US decision – which will see a 25% duty on European steel and a 10% duty on European aluminium – and that the taxes were “unjustified”.

Speaking to BBC Radio 4’s Today programme, Dr Fox said the UK was still seeking exemptions from the tariffs.

“We will still be making that case throughout this week,” he said.

He added: “The United States believes, I believe wrongly and illegally, that this is a national security matter for the US.

“Given that we export some pretty complex steel products to the United States which are part of their national security programmes themselves, this reasoning that is given is wrong and therefore we believe unlawful.”

President Trump originally imposed the tariffs in March, claiming that if the US remained reliant on imported metals, it would threaten the country’s national security and damage its own metal industry.

The tariffs apply to a wide range of steel and aluminium products such as sheets, plates, bars, pipes and “semi-finished” products.

President Trump initially exempted Canada, Mexico and the EU from the tariffs to allow time for negotiations.

However, the exemption ended at midnight on Thursday, meaning the new taxes would be collected from Friday.

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Dr Liam Fox has warned against a “tit-for-tat” trade war with the US

According to UK Steel – the body which represents steel producers across the country – 7% of steel exports go to the US, worth £360m.

About 31,000 people across the UK work in steel production and many more in the supply chain, with steel mills in the North East, East Midlands, Yorkshire, and Wales.

The head of UK Steel, Gareth Stace, said EU leaders had a “gun held to their head” and while he admitted that there was a problem of global over-capacity in the industry, he claimed most of that was in China.

He said that about 20 million tonnes of Chinese steel would need to “find a new home to go to” because of the tariffs.

“Because we are a free and open market here in the UK/the EU, it’ll come here, we believe, and therefore further damage our sector – not only from the direct impact of tariffs in the US but the surge of steel coming here,” he added.

UK exports of aluminium to the US are small, but the UK’s Aluminium Federation said it was concerned about the impact the tariffs could have, hindering free trade.

Dr Fox travelled to Washington in March to seek a further exemption for the UK, as there are concerns it could impact the UK market by increasing its prices, but he was unsuccessful.

Earlier this week, he called the tariff proposals “disappointing” and “absurd”.

‘Trade war’

Dr Fox’s comments follow those of EU trade commissioner, Cecilia Malmstrom, who also called the new tariffs illegal and said the US was playing a “dangerous game”.

French President Emmanuel Macron backed the position, telling President Trump the duties were illegal over the telephone.

But Dr Fox warned against a “tit-for-tat” escalation in the light of EU counter measures, adding: “There can be no victors in a trade war, only casualties.”

The EU has drawn up a target list of 100 US goods worth €2.8bn ($3.5bn, £2.5bn) for its retaliatory tariffs, the BBC understands.

The 10-page list includes Harley Davidson motorcycles, bourbon, Florida orange juice, cosmetics and jeans.

If the list is implemented, it could lead to many every day items becoming more expensive for shoppers in the UK, as shops pass on increased import prices.



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