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Jonathan Reynolds, UK business and trade secretary, will next week urge Donald Trump’s administration to quickly put in place a deal to cut taxes on UK steel exports to zero, even after the US president vowed to double his global steel tariff to 50 per cent.
British officials admit there is still no “clarity” about how Trump’s new 50 per cent tariff on steel and aluminium imports — due to take effect on Wednesday — will hit the UK steel sector and its £400mn of exports to the US.
But the outlook does not look good, with UK officials admitting that “bringing trade deals into force normally takes several months”.
Trump and Prime Minister Sir Keir Starmer signed their non-legally binding trade pact on May 8, but London is still waiting for a clear signal from Washington about when it might take effect.
Reynolds will meet Jamieson Greer, US trade representative, in Paris on the margins of an OECD meeting next week in a bid to thrash out “timelines” for implementing the so-called Economic Prosperity Deal.
After clinching the first accord on trade with the US since Trump started imposing high tariffs, Starmer hailed it as a major coup.
“The steel situation is still unclear,” said one British official, while another said there was a particular focus on London to persuade Trump to accelerate a separate agreement to cut tariffs on UK cars.
Gareth Stace, director-general of the UK Steel trade body, warned that Trump’s plan to double steel and aluminium tariffs from 25 per cent to 50 per cent was “a body blow”.
“Uncertainty remains as to whether and when our second-biggest export market will be open for business or is being firmly shut in our faces,” he added.
Trump agreed on May 8 to cut a 27.5 per cent tariff on cars to 10 per cent for the first 100,000 vehicles shipped from the UK, an agreement that Starmer said would save jobs at carmakers including Jaguar Land Rover.
The prime minister also said at the time that the US had agreed to lower tariffs on UK steel and aluminium exports to zero, but they are set at 25 per cent at present.
In return for cuts to Trump’s tariffs, the UK granted the US greater market access for beef, ethanol and industrial products. None of the proposed tariff cuts on either side of the Atlantic has yet taken effect.
The UK government said: “We are working to ensure that businesses can benefit from the deal as quickly as possible and will confirm next steps in due course.
“The US will need to follow due process on their side, and we will work with them very closely so that this happens as quickly as possible in the coming weeks.
“The Economic Prosperity Deal and any implementing legislation will be presented to parliament in due course.”
Officials in the UK embassy in Washington are working with the US Department of Commerce to try to expedite the enactment of the accord. One British official said: “The original deal stands, in our view.”
Trump’s sectoral tariffs on cars and steel were not affected by the US Court of International Trade’s decision on Wednesday that the “liberation day” tariff scheme was illegal — a ruling later paused by a US federal appeals court.
But trade experts warn that the US president will now be distracted by his battle in the courts and is unlikely to be focused on a trade deal with Britain.
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