Sheffield steel firms facing potentially 'catastrophic' challenges amid US exports row

Sheffield steel firms start the New Year facing a triple whammy of potentially ‘catastrophic’ challenges, an MP has warned.

Wednesday, 5th January 2022, 11:01 am

UK producers must continue to pay a 25 per cent tariff on steel exports to the United States – putting them at a major disadvantage compared to rivals in the EU.

The bloc negotiated an end to the charge from January 1.

Meanwhile, energy and raw material price rises threaten to wipe out profits from a post pandemic recovery, according to Doug Patterson, Unite union regional officer.

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The 25 per cent tariff applies to rolled steel, ingots and bars - and ‘any component that can be made in the US’.

The 25 per cent tariff applies to ‘any component that can be made in the US’.

It also applies to steel originating in the UK and worked on by companies in the EU before being exported to the US.

It was introduced by former president Donald Trump in 2018. Since then, UK steel exports to the US - our second biggest export market - have fallen by half, according to trade body UK Steel.

Now, industry bosses, MPs and unions are calling on the Government to strike a deal fast.

Miriam Cates, Conservative MP for Stocksbridge, said she had raised steel tariffs with international trade secretary, Anne-Marie Trevelyan, in December.

Mr Patterson said once a new supplier was found in the EU, Sheffield firms would struggle to win the business back.

And they were already facing big challenges, he said.

He added: “I spoke to a South Yorkshire steel company that is predicting energy cost hikes in 2022 will be more than predicted profits.”

Sarah Champion, Labour MP for Rotherham, said the UK steel industry ‘could not hope to compete’ with the EU due to tariffs and soaring wholesale energy prices.

Liberty Steel, which has large sites in Stocksbridge and Rotherham, is likely to be affected by the end of US tariffs for EU producers.

She added: “I find it hugely frustrating that after all this time the Government is seemingly no closer to reaching a comparable agreement with the US. UK steel is a vital strategic industry and the Government must prioritise these negotiations.

“Without a concerted effort to reach a deal, the consequences for steel in South Yorkshire could be catastrophic.”

Sheffield MP Olivia Blake said: “When it comes to post-Brexit trade, the Government is very good at talking the talk, with endless promises to level-up British industry. But empty slogans won't save jobs or protect our communities.

“Our region's steel industry is on its knees and the Government is nowhere to be seen.”

Sheffield MP Olivia Blake said: “When it comes to post-Brexit trade, the Government is very good at talking the talk, with endless promises to level-up British industry. But empty slogans won't save jobs or protect our communities."

Dan Fell, Chief Executive of Doncaster Chamber said: “If levelling up means anything to South Yorkshire, the UK government must redouble its efforts to reach an agreement with the US on steel tariffs. Action must be taken now to protect this vital part of our local economy... Resolving this issue is time-critical, it is vital that the steel industry, one of the foundations of our regional economy, does not become collateral damage in a transatlantic trade war.

“In December government ministers warned the US of retaliatory measures, should the tariffs not be lifted, yet nothing has been done. Businesses need reassurance and as government ministers dither, our steel industry suffers.”

Nick Patrick, of Sheffield Chamber, added: “Nothing can be done about it except the British government getting a move on to set up the same agreement as the EU have. The longer it goes unresolved the greater, irreversible effect it will have on British foundries.”

Miriam Cates, Conservative MP for Stocksbridge, said she had raised steel tariffs with international trade secretary, Anne-Marie Trevelyan, in December.

She added: “The Secretary of State has assured me that resolving this is one of her top priorities in the ongoing negotiations, and I will be meeting with her again shortly to discuss progress.

“It's important for the steel industry in Sheffield and across the UK that the US ends these damaging and unnecessary tariffs as soon as possible."

Sarah Champion, Labour MP for Rotherham, said the UK steel industry ‘could not hope to compete’ with the EU due to the tariff and soaring wholesale energy prices.

A Department for International Trade spokesman said: “We recognise the vital role the steel sector plays in our economy and our priority is to resolve this dispute to the benefit of workers and businesses on both sides of the Atlantic, removing the need for the UK to levy retaliatory tariffs on US goods.

“Until that resolution is agreed, the UK will continue to apply its rebalancing measures to defend our economic interests and the rules-based international trading system.”

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Business Editor David Walsh talks to Doug Patterson, Unite Regional Officer, about US import tariffs continuing for steel producers