Customers flee from steel orders amid Trump tariffs
- The US implemented a 25% tariff on steel imports, prompting UK customers to reconsider their orders.
- Tata Steel and British Steel reported that clients are seeking to cancel orders or look for other suppliers.
- The ramifications of these actions could lead to significant damage to the sales and profitability of the UK steel sector in the near future.
The recent imposition of tariffs on steel and aluminum imports by the United States has sent shockwaves through the UK steel industry. Earlier this month, US President Donald Trump announced a 25% tariff on global steel imports with no exceptions, raising concerns among UK-based steel producers regarding potential sales and profit losses. Bosses at Tata Steel UK and British Steel reported that the tariffs have spooked customers, leading many to reconsider their orders, with some already initiating cancellations. Tata Steel's UK Chief Executive Rajesh Nair indicated that customers are opting for alternative suppliers to avoid being impacted by what he termed 'tariff warfare.' This shift in customer behavior has raised alarms about the potential significant damage to sales and profitability for UK steel companies over the coming months. Allan Bell, Chief Commercial Officer at British Steel, echoed these sentiments, mentioning that the group supplies around 50,000 tonnes of steel to the US market and that domestic producers in the US are causing British Steel to exit certain business areas immediately. As customers express concerns about the impact of these tariffs, some have started to look for steel elsewhere, with estimates suggesting it may take nine months to develop collaborative tooling capabilities with domestic suppliers. The UK government's response has been comparatively restrained, with officials considering various options but refraining from immediate retaliatory measures, unlike the European Union that has proposed counteractions against US goods. Current statistics suggest that about 5% of the UK's steel exports and 6% of aluminum exports by volume are directed to the US, though industry trade bodies argue that these figures underestimate the true scale of the transactions across the Atlantic. These developments occur against a backdrop of an already struggling steel industry in the UK, characterized by numerous job losses due to global competition, high energy costs, and a shift toward cleaner technologies.