Hopes for a long-awaited breakthrough in the UK’s steel trade with the United States have been dashed, as negotiations to eliminate tariffs on British steel exports were abruptly shelved just hours before President Donald Trump’s state visit to Britain on September 16, 2025. The prospect of zero tariffs—a goal that had been trumpeted by Prime Minister Keir Starmer’s government earlier this year—has faded, leaving UK steelmakers facing a continued 25% levy at the American border, a reality that has sparked disappointment and debate across industry and political circles.
For months, ministers and trade officials in London had worked to secure a deal that would see the US scrap the 25% tariff on British steel, a measure first imposed years ago and described by industry executives at the time as "devastating," according to BBC. The move was expected to provide a much-needed boost to the UK’s embattled steel sector, which exports about 6% of its volume and 9% of its value to the US market. But as President Trump prepared for his second state visit—hosted with great fanfare by King Charles at Windsor Castle—hopes for a last-minute agreement collapsed, with government insiders telling The Guardian that the deal had been put on ice.
The shelved agreement would have secured zero tariffs on a small quota of British steel exports, with the potential for that quota to grow once lingering US concerns about the origin of the UK’s raw materials were addressed. Instead, ministers are now seeking to lock in a permanent guarantee that US tariffs on British steel will not exceed 25%, while most other countries continue to face a much steeper 50% rate. As a government spokesperson told The Telegraph, "Thanks to the strength of the UK-US partnership, we are still the only country to benefit from a 25% tariff on steel exports to the US, reinforcing our position as a trusted source of high-quality steel."
This outcome, however, is far from the tariff-free access that industry leaders and politicians had been hoping for. William Bain, head of trade policy at the British Chambers of Commerce (BCC), warned that "news of permanently higher steel tariffs will be greeted with dismay by UK industry given the earlier pledge to work towards a 0% rate." The BCC also cautioned that the 25% tariff would "negatively impact" jobs in the sector and urged the government to continue pressing US officials for further concessions.
Gareth Stace, director general of UK Steel, echoed these concerns, noting, "It will be disappointing if we do not have the tariff-free quota level, but if the US was never offering that deal, then the final decision on 25% offers a degree of certainty and potentially a competitive advantage so long as other countries remain at 50%." Stace also emphasized the broader context: "British steelmakers were facing a deluge of heavily subsidised steel flooding into international markets," forcing countries like the UK to consider stronger trade defenses. "It is even more imperative now that the UK government beefs up its own trade defences to ensure UK steelmakers have a sustainable share of their own market. In these market conditions, the last country to protect their industry will be the first to lose it," he told BBC.
The political fallout has been swift. Opposition figures seized on the government’s retreat from its earlier promises. Andrew Griffith, shadow secretary for business and trade, said, "On May 8 the Prime Minister claimed credit for negotiating steel tariffs to zero. Now it turns out that was untrue and it’s actually 25%. Either his maths or his relationship with the truth clearly needs some work." Labour chair Liam Byrne also warned that Britain now trades with its largest partner—namely the US—on terms "worse than the past."
President Trump, for his part, struck a more conciliatory tone as he boarded Air Force One en route to London. "They want to see if they can refine the trade deal a little bit," he told reporters, according to BBC. "We’ve made a deal, and it’s a great deal, and I’m into helping them. They’d like to see if they could get a little bit better deal. So, we’ll talk to them." While Trump’s comments raised hopes of a breakthrough, British negotiators have reportedly given up on securing a zero-tariff arrangement in the near term, instead focusing on cementing the 25% rate as a permanent fixture.
The underlying reason for the breakdown in talks appears to hinge on US concerns about the source of Britain’s raw steel imports. American officials have raised questions about the UK’s largest steel producer, Tata, which has shut down its blast furnaces pending the completion of new Electric Arc furnaces due in 2027. The fear is that Britain could become a backdoor for cheap steel imports from third countries, undermining US market protections. As a result, the US has been reluctant to offer even a limited zero-tariff quota until these issues are resolved.
The timing of the setback could hardly be worse for Britain’s steel industry, which is already under considerable financial strain. In August, Liberty Steel plants in Rotherham and Stocksbridge fell into government control, following similar action at Chinese-owned plants in Scunthorpe. Industry executives told BBC that while the 25% tariff is disappointing, at least it provides some certainty in a volatile global market awash with surplus capacity and protectionist barriers.
One unnamed steel producer, quoted by BBC, admitted to being "furious" about the situation, noting that they would now struggle to compete with American manufacturers who enjoy a price advantage. Another industry insider, speaking to The Guardian, said, "Getting certainty is sometimes better than just continuing negotiations. That period of uncertainty has been really quite difficult to handle for steel companies." Still, some found a silver lining, pointing out that UK exports retain an edge over EU competitors, who face even higher US tariffs.
The government, meanwhile, insists it is not giving up. "We are continuing to work closely with the US to deliver certainty for UK industry, protect skilled jobs and support economic growth as part of our Plan for Change," a spokesperson told The Telegraph. Ministers also highlighted the broader economic relationship between the UK and US, pointing to a new £31 billion technology investment deal involving AI and nuclear energy, which is expected to create over 5,000 jobs in northeast England. The pact includes a domestic version of the White House’s Stargate AI infrastructure project and significant commitments from US tech firms such as Open AI, Nvidia, Blackstone, Microsoft, CoreWeave, and Salesforce.
Yet, even as the government touts these achievements, critics warn that the focus on attracting US investment must not come at the cost of Britain’s ability to tax and regulate new technology. Nick Dearden, director of Global Justice Now, cautioned that "this pact is turning us into no more than an aircraft carrier for US big tech," while others raised concerns about the environmental impact of large data centers included in the deal.
As the dust settles, the fate of Britain’s steel industry remains uncertain. The government’s pivot to a permanent 25% tariff may offer some stability, but the sector’s long-term prospects depend on whether UK officials can eventually secure more favorable terms—and on their ability to shield domestic producers from the stormy crosswinds of global trade.
