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Steel industry braced for fresh crisis as US tariff fears grow

British and European steel makers are bracing for a fresh crisis in the industry unless the US backs down from its protectionist stance and extends an exemption on import tariffs.
The US granted temporary relief to European producers from 25pc tariffs on steel and 10pc levies on aluminium as Donald Trump, the US president, introduced the measure in a move widely seen as targeting imports from China.
However, the exemption runs out on Tuesday. Wilbur Ross, the US commerce Secretary, said over the weekend that administration planned to extend the relief to some countries, but not all, and refused to be drawn on which ones would remain exempt.
Tariffs would hit steel makers this side of the Atlantic hard, with the industry only just recovering from the 2015 crisis which cost tens of thousands of jobs. Closure of the US market creates the potential for a “double whammy” to the European industry. Not only is America a major market – steel exports to the US accounts for about 7pc of UK steel production and are worth about ?330m a year – but Chinese producers are likely to flood Europe with excess output, a major cause of the crisis of three years ago.
China is the world’s largest steel producer, responsible for more than half of the 1.6bn tons of annual global output.
Steel industry braced for fresh crisis as US tariff fears grow

Britain's steel industry was thrown into crisis in 2015 with a flood of imports partly to blame

Credit:
Getty
The US Commerce Department is understood to want to extract concessions on other goods – such as cars – in exchange for a continued exemption, but there is little sign of concrete progress on this.
Last month Mr Trump said that if the EU responds to the steel tariffs with levies of its own he would respond. In a tweet the president said: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US.”
However, the EU indicated on Friday that it could stage talks on changing World Trade Organisation agreements if the US grants a permanent exemption on the steel tariffs.
Steel industry braced for fresh crisis as US tariff fears grow

China is the world's largest producer of steel
Individual companies are understood to be reluctant to speak out for fear of attracting Mr Trump’s attention on Twitter. However, heavyweight player Tata Steel Europe did say it was “opposed to the 25pc blanket tariff”, warning that without “swift and robust action the market could be destabilised by millions of tons of steel diverted away from the US into Europe”
UK Steel warned that tariffs will not tackle the structural problem in the sector. Gareth Stace, its director, said: “Unilateral tariffs are not the answer to the problem of over-capacity in the steel sector, leading only to disruption to global trade, increases in steel prices in the US and escalation towards a global trade war. Nothing good will come of it, not at home in the US, not in Europe and not globally.”
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