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Here’s where things stand on Wednesday 4 June 2025:
Summary
- US President Donald Trump has signed an executive order doubling US tariffs on steel and aluminium imports to 50% – but the UK is temporarily exempted
- The order signed by Trump raises import taxes for US-based firms buying from other countries from today, but the levy remains at 25% for British firms
- The order depends on the UK and US tariff deal signed last month, which would see steel and aluminium levies axed
- However, the agreement is yet to come into force, meaning UK steel exporters face tariffs until then and could face the higher amount if the pact falters
- The UK government says it is “committed to protecting British business and jobs”, but the Conservatives call the order a “fresh tariff blow”
An uncertain open for UK shares
The FTSE 100 barely budged when it opened at 8.00am this morning – perhaps investors are taking a wait-and-see approach to US tariffs on UK steel and aluminium.
The stock market index fluttered between gains and losses first thing – it is currently a little lower at 8,783.04. Meanwhile, the FTSE 250 is up 0.27%.
We know that the UK has been exempted from Trump’s doubling of tariffs to 50%, and it should avoid a 25% when a deal is finally signed with the US.
But that’s not scheduled to happen for a few weeks and, as we’ve seen, there’s no certainty when it comes to Donald Trump and tariffs.
The UK exemption and ultimate deal is not a free lunch
There is now an uncertain period when businesses on both sides of the Atlantic don’t know if the tariff will be 0 or 50% in five weeks time – which anecdotally is having a corrosive effect on business.
There is no reason to assume it won’t. The government said that Business Secretary Jonathan Reynolds and US Trade Representative Jameson Grier agreed that both would work fast so customers in US and UK benefit from the deal.
However, there is a second order effect that international steel that was headed for the US may now be diverted to UK markets undercutting steel makers in their domestic market and the industry wants the government to take action to prevent that.
The UK exemption and ultimate deal is not a free lunch. The UK cut tariffs cut on some US beef products and ethanol which is creating a crisis in the UK ethanol market which in turn is a big customer of wheat farmers.
It’s possible that UK government efforts to protect these industries will be viewed by the US as backsliding on the deal they struck with the UK.
A reminder that these deals have complex and sometimes under-appreciated knock on effects.
Relief for UK trade officials but new clock ticking on deal
It’s hard to argue the UK exemption from the doubling on tariffs on imported steel from 25 to 50% is not good news.
It was not a given that the UK would get this exemption despite having done a deal on 8 May to reduce tariffs to zero.
That deal is not yet in force and speaking to steel industry leaders and government officials right up to the announcement of this last night, their working assumption was that the UK would be in the same boat as everyone else facing tariffs of 50% until that deal was finalised.
There was a palpable sense of relief from UK trade officials.
Having said that there is a new clock ticking. Last night’s announcement contained a provision that if the deal is not finalised by 9 July, the UK be set at 50%.
UK Steel: Enormous amount of uncertainty in the industry
We can bring you some more now from Gareth Stace, chief executive of UK Steel, who has just spoken to BBC Radio 4’s Today programme.
Stace says there is still an “enormous amount of uncertainty” in the steel industry, as it can take three weeks to export steel to US customers.
UK steel exporters’ customers have been cancelling or indefinitely pausing their orders following US President Donald Trump’s decision to double tariffs to 50%, he says.
He adds that the indirect impact of steel moving away from US markets might be a surge in imports to the UK, which could displace domestic production.
He calls on the government to tighten up the UK steel safeguard and ensure the industry can see what’s coming down the line, “to make sure we don’t suddenly find ourselves with a flood of steel that can put us out of business”.
British industry can ‘breathe a temporary sigh of relief’, says UK Steel chief
Gareth Stace, the chief executive of UK Steel, says the steel industry can “breathe a temporary sigh of relief” this morning.
“What we really want to get to is those tariffs removed,” he tells BBC Radio 4’s Today Programme.
“We hope that a deal can be made soon enough, and certainly before 9 July, which is the next deadline in our tariff story,” he says.
US President Donald Trump said that the UK needed “different treatment” on tariffs on steel and aluminium because of the US-UK Economic Prosperity Deal (EPD), signed between the two countries on 8 May.
However, Trump later added that the US might increase the tariff on the UK “on or after 9 July 2025” if it “determines that the United Kingdom has not complied with relevant aspects of the EPD”.
Asian markets take Trump’s executive order in their stride
Major Asian stock markets have taken Trump’s signing of an executive order to double tariffs on steel and aluminium in their stride today.
Benchmark indexes in big steel producing and car making countries like Japan, South Korea, India and China are all trading higher.
The most marked investor reaction to the latest metals import taxes came on Monday after the US president had announced plans to make the move on Friday.
At the start of the trading week, shares in steelmakers and car firms across the region fell sharply.
UK government welcomes exemption but Tories say ‘businesses in limbo’
The UK’s carve-out in the executive order comes after Business Secretary Jonathan Reynolds met with US Trade Representative Jamieson Greer in Paris on Tuesday.
A spokesperson said the government was “pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs”.
“We will continue to work with the US to implement our agreement, which will see the 25% US tariffs on steel removed,” they say, adding the government is “committed to protecting British business and jobs”.
But the Conservatives call the order a “fresh tariff blow” and accuse Labour of leaving “businesses in limbo”.
Shadow business secretary Andrew Griffith said: “Labour’s botched negotiations have left businesses in limbo and this country simply cannot afford their continuing failure.”
What does the UK-US tariff deal say about steel and aluminium?
The UK and the US reached a deal over tariffs on some goods last month, removing levies on some of the UK’s exports, including cars, steel and aluminium.
But it leaves a 10% duty in place on most goods from the UK.
Under the deal, a 25% tariff on steel and aluminium imports into the US that came into effect in March is scrapped.
However, the White House said it would impose a quota on the “most favoured nation rates for UK steel and aluminium and certain derivative steel and aluminium products”.
It is currently unclear how much of these products the UK will be able to export to the US under this quota system without paying more.
It is also unclear whether the scrapping of tariffs will apply to steel derivative products and whether only steel melted and poured in the UK will benefit.
The UK exports a relatively small amount of steel and aluminium to the US, about £700m in total.
However, the tariffs also cover products made with steel and aluminium, including things such as gym equipment, furniture and machinery.
These are worth much more, about £2.2bn, or about 5% of UK exports to the US last year.
How we got here
- 10 February: Trump announces 25% tariffs on all steel and aluminium imports to the US – the new duties kicked in on 12 March
- 2 April: Trump announces most countries – including the UK – will face a 10% “baseline” tariff on all goods sent to the US
- 8 May: UK and US agree to reduce or remove some levies
- 4 June: US raises import taxes for steel and aluminium to 50% – the levy temporarily remains at 25% for the UK
UK temporarily spared from Trump’s 50% metal tariffs
The UK has been temporarily spared from US President Donald Trump’s executive order doubling steel and aluminium tariffs from 25% to 50%
The order signed by Trump raises import taxes for US-based firms buying from other countries from Wednesday – but the levy remains at 25% for the UK.
The order depends on the UK and US tariff deal signed last month, which would see steel and aluminium levies axed, however, the agreement is yet to come into force, meaning UK steel exporters face tariffs until then and could face the higher amount if the pact falters.
The UK government says it is “committed to protecting British business and jobs”, but the Conservatives call the order a “fresh tariff blow”.
The UK government spokesperson adds it will “continue to work with the US to implement our agreement, which will see the [tariffs] removed”, with the legislation implementing the deal to be presented in Parliament “in due course”.
We’ll bring you updates, reaction and analysis throughout the day, so stay with us.
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