UK and US Steel Tariffs After Brexit: The Complexities Ahead
Will the UK be exempt from the US’s new EU steel and aluminium tariffs after Brexit? As of now, the answer is far from clear.
The situation is complicated, and it could well be that the UK government will negotiate a deal whereby they give the US tariff-free steel and chlorine-washed chickens in exchange for 40 of the NHS (National Health Service).
Current Exemptions
Currently, the UK is covered under the exemptions granted to the EU countries from the US steel and aluminium tariffs. However, this exemption is temporary and is subject to change.
Trade Deals and Market Dynamics
Trade deals that the UK is supposed to negotiate independently after Brexit will play a crucial role in determining the future of steel and aluminium imports and exports. The UK has little to offer in this regard. With UK steel production at an all-time low, there is a possibility that the UK might be interested in importing US steel at a lower price without import duties.
The US might reciprocate by allowing the import of British steel. However, would US steel be cheaper than German steel, considering the additional transport costs? Moreover, does the UK have the industrial capacity and entrepreneurship to restart its steel production? Historical data shows that UK steel production is less than a third of Italian production and a sixth of German production. (Steel Figures 2017)
Resuming Steel Production
The assumption that the UK would resume steel production and aluminium smelting is complex and multifaceted. It requires not only economic incentives but also a significant revival of the industrial ecosystem and skilled labor. Without robust supply chains and infrastructure, it is challenging to imagine the UK becoming a major player in steel and aluminium production again.
Conclusion
The situation regarding the UK and US steel tariffs after Brexit is a reflection of the broader challenges faced by the post-Brexit economy. Trade deals, industrial capacity, and economic incentives play a crucial role in determining the future of both importing and exporting steel and other critical commodities. As negotiations continue, the UK and the US must find a way to balance their interests to avoid trade wars and promote economic growth for both nations.