UK steelmakers have warned that the imposition of new US tariffs would be “a devastating blow” to the industry, after Donald Trump said he would announce 25% tariffs on steel and aluminium imports into the US.
Gold reached a record high and aluminium prices rose as financial markets were rattled by the US president’s comments, which caused concern in the UK and the EU.
Gareth Stace, the director general of the trade body UK Steel, said: “The US is our second-largest export market after the EU. At a time of shrinking demand and high costs, rising protectionism globally, particularly in the US, will stifle our exports and damage over £400m worth of the steel sector’s contribution to the UK’s balance of trade.”
Stace said it would be “deeply disappointing” if Trump decided to target UK steel, given its “relatively small production volumes compared to major steel nations”.
He added that there was a danger that other countries could decide to dump steel on the UK market to avoid US tariffs. “The introduction of further US tariffs will inevitably divert global trade flows, with excess steel potentially redirected to the UK market,” he said.
UK Steel’s members include Tata, the owner of the vast Port Talbot steelworks, and troubled British Steel, owned by China’s Jingye.
Trump is expected to formally announce new tariffs this week. Community, the union for the UK steel industry, said the prospect of fresh duties was extremely concerning and could threaten jobs.
Alasdair McDiarmid, the Community assistant general secretary, said: “For the US it would also be self-defeating as the UK is a leading supplier of specialist steel products required by their defence and aerospace sectors.”
The European Commission said: “The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures.”
As investors rushed for a haven for their money, the spot price of gold increased by 1.6% to $2,910 an ounce, above the record high set on Friday. Gold has been rising in recent weeks amid concerns over the impact of Trump’s policies. It has gained more than 10% since the start of the year, after ending 2024 at $2,623 an ounce.
Aluminium prices also rose, as investors worried that the tariffs could lead to supply problems and hit economic growth, which would reduce demand for the metal. The three-month aluminium contract on the London Metal Exchange has gained by 0.3% to $2,635 (£2,122) a tonne.
In London, the FTSE 100 hit a record high as the dollar strengthened against the pound – reaching 8,770.08 points, three points above the previous intraday high set last week. Most companies on the index are large multinationals that earn their revenues in dollars and report profits in sterling.
On Wall Street, the Dow Jones industrial average and the S&P 500 jumped more than 0.5% at the open, with the Dow up 246 at 44,550 points.
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Shares in US steelmakers rose on hopes the tariffs would hit competitors or allow them to raise prices. Cleveland-Cliffs, North America’s largest flat-rolled steel producer, shot up by 16% and Nucor Corporation, the Charlotte, North Carolina-based steelmaker, gained 6%.
Speaking to reporters onboard Air Force One, the US president said he would announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, matching the tariff rates levied by other countries. “Very simply, it’s ‘if they charge us, we charge them’,” Trump said.
Canada, Brazil, Mexico, South Korea and Vietnam are the biggest sellers of steel into the US, according to government and American Iron and Steel Institute data, while Canada is the main supplier of imported aluminium.
Trump said on Sunday that his administration was examining US treasury debt payments for possible fraud, suggesting that the country could have less debt than thought. According to the US treasury, the US has $36tn of public debt, equal to more than 120% of GDP.
Trump said administration officials who had been combing through payment records to identify any wasteful spending had turned their attention to debt payments.
“We’re even looking at treasuries,” Trump said. “There could be a problem – you’ve been reading about that – with treasuries, and that could be an interesting problem.”
It was not clear whether Trump was referring to debt service or other government payments made by the treasury department.
