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Tata Steel has warned that it could be excluded from tariff-free access to the US under the UK trade agreement with Washington, putting more than £150 million annual exports at risk.
The UK’s largest steel producer, which owns a vast port Talbot Site in South Wales, fears that it will not be able to export to the US due to the origins of its products under an agreement announced last month between the UK and the US.
After closing two explosive furnaces in Port Talbot last year, Tata imported steel from sister plants in India and Dutch, processed it in the UK before shipping it to customers. However, this could violate US import regulations requiring all steel to be “melted and poured” in countries where it is imported.
Earlier this week, US President Donald Trump exempted British steelmakers from doubling US steel and aluminum tariffs from 25% to 50%. Last month’s US-UK trade agreement promised to reduce these tariffs to zero, but it has not yet been agreed that this will take effect. The exact details of the transaction have not been confirmed yet.
Tata Steel UK CEO Rajesh Nair said in a statement Friday that his company is urging the government to “securing transactions as soon as possible.”
He said Tata will need to continue importing steel from the second half of 2027 until new electric arc furnaces become operational. He therefore said, “What was melted and poured in the UK is not a requirement to access steel allocations in future trade agreements.”
“We don’t currently melt steel in the UK, but we continue to be the largest steel producer in the country and our factory continues to convert imported steel coils and slabs into high value specialized products that are essential to our U.S. customers,” he said.
According to people familiar with the situation, Tata has been warning the minister about risks to the business for weeks. The company exports more than 150 million pounds of steel to the United States each year, including packaging products.
British negotiators are trying to secure a carve-out for Tata. One government official added that US talks are underway and that the UK is confident that all British steel producers, including Tata, “feeling the profits of the transaction.”
The US is the UK’s second most important steel export market after the EU, worth around £400 million a year.
British officials are also under pressure from Washington to ensure that Chinese steel enters the United States through the UK, given its Chinese ownership of British steel. The UK government seized control of the UK’s second largest steel producer in April.
The government is defending a trade deal with Trump. The UK said a government spokesman “said last month it is the first and currently the only country to secure a trade agreement with the US. We are committed to protecting UK businesses and jobs across key sectors, including steel, as part of our change plan.”
The government said, “We will continue to work with the US to implement the agreement, which means removing the 25% tariffs that have been removed from the US.”
