UK seeks ‘pragmatic’ deal with US to avoid future tariffs

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The UK said it was “disappointing” that the US imposed tariffs on British steel and aluminium imports, but stopped short of announcing retaliatory measures as it promised to take a “pragmatic approach” it believes could shelter it from future levies.

“It’s disappointing the US has today imposed global tariffs on steel and aluminium,” said Jonathan Reynolds, business and trade secretary, after a 25 per cent levy on steel and aluminium came into force overnight.

“We are focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy.”

But despite not immediately retaliating, he added: “We will keep all options on the table and won’t hesitate to respond in the national interest.”

The UK’s decision was starkly different from the EU, which immediately hit the US with €26bn of retaliatory tariffs on American goods.

Trade body UK Steel warned the tariffs “couldn’t come at a worse time” as the industry is already facing high energy costs and sluggish demand.

The calculation in London is that the US tariffs, which will add £100mn to the cost of UK steel exports, are not big enough to trigger a full scale response, which would inflame relations in Washington.

British officials say Prime Minister Sir Keir Starmer and Reynolds hope that an “economic deal” with Washington — initially based on co-operation in areas such as technology and artificial intelligence — could take Britain out of the line of fire in what could be an escalating transatlantic trade war.

That proposed agreement was discussed by Starmer and President Donald Trump at the White House last month, but it is far from clear whether it can be negotiated, or whether ultimately it will be sufficient to spare Britain from further tariffs.

Last month Trump told Starmer at the White House he thought the UK and US could end up with a “real trade deal” without tariffs and called the prime minister a “tough negotiator”.

Starmer urged Trump not to impose new steel tariffs on Britain in a phone call over the weekend and Reynolds made similar pleas to his US counterpart Howard Lutnick, but to no avail.

Britain’s softly-softly approach to the Trump trade war, enabled by the UK’s exit from the EU and its common commercial policy, will be viewed warily in Brussels, especially as Starmer is seeking to “reset” relations with the EU in the coming months.

In the short term Britain’s response to the US steel and aluminium tariffs will be focused on wider government support for the sector, including a plan to cut the energy bills of heavy industry. “We remain resolute in our support for UK industry,” Reynolds said.

He said the government was also backing industry’s application to the Trade Remedies Authority — an arm’s length body — to “investigate what further steps might be necessary to protect UK producers”.

Britain already has some “safeguards” in place to protect its steel industry from cheap imports of some products above a certain level — with tariffs of 25 per cent — which are in place until June 2026.

Reynolds said: “I will continue to engage closely and productively with the US to press the case for UK business interests. We will keep all options on the table and won’t hesitate to respond in the national interest.” He said the government had committed up to £2.5bn to help rebuild the sector.