The UK government has swiftly advanced its plans for a £2.5bn investment in the domestic steel sector following Donald Trump’s announcement of a 25% tariff on all steel and aluminum imports into the United States.
Business Secretary Jonathan Reynolds is set to release a green paper titled Plan for Steel this Sunday—several weeks ahead of schedule—highlighting the urgency felt by the UK government to stimulate economic growth in light of the global impacts of Trump’s tariffs.
In an interview with the Observer, Reynolds indicated that even before Trump returned to the White House, the government was committed to enhancing and expanding the UK steel industry. However, the president’s recent actions have intensified the urgency to act. “The situation at home and abroad emphasizes the urgency of our strategy’s early publication,” he noted.
Addressing the implications of the Trump tariffs, he remarked: “This poses another challenge, but it makes accelerating the strategy even more critical.”
Currently, the UK has refrained from joining the EU and Canada in immediately retaliating against the US if the tariffs are enforced next month. Britain exports approximately 209,000 tonnes of steel to the US annually while importing around 16,000 tonnes, making it the second-largest market after the EU.
“These tariffs are detrimental to both parties,” Reynolds stated, expressing optimism that discussions with US officials could yield a favorable outcome before substantial damage occurs.
Last week, Gareth Stace, director general of industry group UK Steel, warned that the US’s actions would hinder UK exports and negatively affect Britain’s trade balance, especially as global protectionist measures rise.
“The US is our second-largest export market after the EU, and this decision jeopardizes over £400m in annual steel exports,” Stace commented.
In its election manifesto, the previous Labour opposition committed to investing £2.5bn to “rebuild the UK steel industry.” This funding will complement a separate £500m package for Tata Steel to partially finance new steel production at Port Talbot.
Ministers are now focused on expediting decisions regarding the optimal allocation of this investment to enhance the steel industry, prioritizing government co-financed innovative projects spearheaded by the private sector. One objective is to ensure that the weakened UK steel industry can effectively serve as the primary supplier for essential infrastructure projects at the core of the government’s growth strategy.
Recently, Heathrow provided positive news for British Steel and the industry at large by committing to utilize UK-produced steel in its largest-ever investment program, assuring similar intentions for the controversial proposed third runway should it receive the go-ahead.
Heathrow’s projects utilizing UK steel will include infrastructural aspects of the new terminal, with plans for enhancements to Terminal 2 and Terminal 5.
after newsletter promotion
During prime minister’s questions on Wednesday, Liberal Democrat leader Ed Davey urged Keir Starmer that the UK needed to respond to Trump more assertively. “Remaining passive and hoping Trump won’t impact us is not viable,” Davey stated, emphasizing the need for the UK to negotiate “from a position of strength.”
Starmer replied that the UK’s approach would entail a “calm evaluation of the consequences.” He added: “However, we will always prioritize our national interests and those of steelworkers.”
The upcoming green paper will examine long-standing issues affecting the industry, such as high energy expenses, global instability—including the repercussions of tariffs—and scrap metal recycling, all aimed at safeguarding jobs and living standards in the UK’s steel-producing regions.
A portion of the £2.5bn investment is anticipated to be allocated to electric arc furnaces, which can heat steel to high temperatures without utilizing fossil fuels.
Reynolds declared: “The UK steel sector has a promising future under this government. We communicated this during the election, and we are now putting it into action.”
