UK Steel fears “devastating blow” from Trump tariffs
Trade body UK Steel has warned that the imposition of US tariffs on UK steel would be “a devastating blow” to the industry.
UK Steel director general, Gareth Stace, says:
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 £400 million worth of the steel sector’s contribution to the UK’s balance of trade.
Stace says it would be “deeply disappointing” Trump decides to target UK steel, given its “relatively small production volumes compared to major steel nations”.
H explains:
The UK produces world-leading steel, supplying the US with high-quality products for defence, aerospace, stainless, and other critical sectors, materials that simply cannot be replicated elsewhere.
The danger, Stace adds, is that other nations decide to dump steel on the UK market to avoid US tariffs:
“At the same time, the introduction of further US tariffs will inevitably divert global trade flows, with excess steel potentially redirected to the UK market. This reinforces the urgent need for watertight UK trade measures in 2026 to prevent surges in imports following the UK’s steel safeguards expiry.
Accelerating the UK’s CBAM [Carbon Border Adjustment Mechanism] to 2026 would provide an additional layer of protection against unfairly priced steel. The UK Government must act decisively to shield our domestic industry from the fallout of rising global protectionism.”
Reminder: We don’t yet know if the UK will be subject to the 25% tariff on steel which Trump announced last night, or if exemptions will be available; British ministers said today they must ‘wait and see’ what the US does…
Key events
Closing post
Time to wrap up here… our US politics Live blog will be tracking the action on that side of the Atlantic.
To recap….
Financial markets are shrugging off trade war fears, after Donald Trump declared the US will impose 25% tariffs on steel and aluminium imports.
In London, the FTSE 100 has hit a new all-time high, touching 8,779 points for the first time ever, with housebuilders and mining stocks among the risers.
BP was the top gainer on the Footsie, after activist investor Elliott Investment Management took a stake.
Wall Street has opened higher, where shares in US steel makers rallied at the open – amid chat that tariffs will give them a competitive advantage to grow market share and lift their own prices.
Gold hit a new alltime high this morning to, rising above $2,900 per ounce.
Europe has vowed to respond to Trump’s threat, with German chancellor Olaf Scholz warning that “anyone who imposes tariffs must expect counter-tariffs.”
The UK government declined to comment, with Downing Street saying it has not seen details of Trump’s proposed steel and aluminium tariffs.
The UK steel industry is certainly worried, though.
Gareth Stace, director general of UK Steel, says:
The UK produces world-leading steel, supplying the US with high-quality products for defence, aerospace, stainless, and other critical sectors, materials that simply cannot be replicated elsewhere.
“At the same time, the introduction of further US tariffs will inevitably divert global trade flows, with excess steel potentially redirected to the UK market. This reinforces the urgent need for watertight UK trade measures in 2026 to prevent surges in imports following the UK’s steel safeguards expiry.
Accelerating the UK’s CBAM [Carbon Border Adjustment Mechanism] to 2026 would provide an additional layer of protection against unfairly priced steel. The UK Government must act decisively to shield our domestic industry from the fallout of rising global protectionism.”
Five former US Treasury secretaries have attacked the actions of Elon Musk’s new Department of Government Efficiency (DOGE), warning that America’s financial credibility is at risk.
Look out, New Delhi!
India has “enormously high” tariffs that lock out imports, US President Donald Trump’s top economic adviser Kevin Hassett has said today in a TV interview.
Hassett told CNBC that Trump believed the US should impose reciprocal tariffs that are at least equal to those imposed by other countries, adding:
“If they go down, we’ll go down.”
“Almost every trading partner has much higher tariffs than we do.
Hassett also noted that Canada, Mexico and the UK had tariffs in the same range as the United States.
As this chart from Deutsche Bank shows, India would be in the front line to be hit by reciprocal tariffs:
Wall Street opens higher as US steelmakers rally
Wall Street has opened higher at the start of trading in New York, as shares in steel makers rally.
The Dow Jones industrial average and the broader S&P 500 have both jumped over 0.5% at the open, with the Dow up 246 points at 44,550 points.
Cleveland-Cliffs, North America’s largest flat-rolled steel producer, have surged by 16% at the open.
Nucor Corporation, the Charlotte, North Carolina-based steelmaker, is up 6%.
New tariffs can help the US steel industry in two ways – either by driving away steel made overseas, or by allowing the American industry to raise its prices (because foreign-made steel will be more expensive).
Germany’s chancellor, Olaf Scholz, has warned that those who impose tariffs must expect retaliatory tariffs.
Reuters reports that Scholz told reporters at an election event in northern Germany:
“Currently, given that nothing is yet official, we can only say with great caution but great clarity: Anyone who imposes tariffs must expect counter-tariffs.”
GERMAN CHANCELLOR SCHOLZ ON TRUMP TARIFF THREAT: THOSE WHO IMPOSE TARIFFS MUST EXPECT RETALIATORY TARIFFS
— CGTN Europe (@CGTNEurope) February 10, 2025
The FTSE 100 index isn’t the only share index hitting a record high.
The pan-European STOXX 600, which includes the largest companies across the region, has hit a new alltime high today, as investors prove to be unphased by trade war fears….
Credit rating agency Moody’s has warned that the triple-A ratings of the World Bank and other top multilateral lenders would be at risk if the United States withdraws support for them
Last week, Trump signed an Executive Order to review US government support to all international intergovernmental organisations of which it is a member and to withdraw from some United Nations organisations.
In a report published this morning, Moody’s says:
“The US is a key shareholder in a number of rated MDBs (multilateral development banks), hence it would be credit negative if it materially reduced its commitment to them.”
Former US Treasury secretaries: Our Democracy Is Under Siege
Five former US Treasury secretaries have attacked the actions of Elon Musk’s new Department of Government Efficiency (DOGE), warning that America’s financial ccredibility is at risk.
Robert Rubin, Lawrence Summers, Timothy Geithner, Jacob Lew and Janet Yellen – collectively the 70th, 71st, 75th, 76th and 78th secretaries of the Treasury – have warned that the tradition that America’s payment system has historically been operated by a very small group of nonpartisan career civil servants has been upended, after Musk’s Doge team was granted ‘full access’ to the federal payment system.
Writing in the New York Times today, the distinguished quintet warn that the political actors at DOGE have not been subject to the same rigorous ethics rules as civil servants, and lack the training and experience to handle private, personal data.
They say:
While significant data privacy, cybersecurity and national security threats are gravely concerning, the constitutional issues are perhaps even more alarming.
We take the extraordinary step of writing this piece because we are alarmed about the risks of arbitrary and capricious political control of federal payments, which would be unlawful and corrosive to our democracy.
They point out that it is up to Congress to decide how US. federal dollars are spent, saying:
During our collective 18 years at the helm of the Treasury, we never were asked to stop congressionally appropriated funds from being paid out in full. Not since the Nixon administration has this type of executive action been contemplated. At that time, the Supreme Court ruled unanimously that the president did not have the power to withhold federal funds that Congress had authorized.
The federal payments system controls more than $6tn of federal cashflow each year, with millions of Americans depending on it for social security and Medicare benefits.
Rubin, Summers. Geithner, Lew and Yellen explain:
People often rely on these funds for survival, making any risk of their cutoff or delay existential. But even more than the importance of making good on particular commitments is the importance of making good on the principles that this country stands for.
We have during our service in the Treasury Department faced moments of crisis, when the specter of an American default loomed. Any hint of the selective suspension of congressionally authorized payments will be a breach of trust and ultimately, a form of default. And our credibility, once lost, will prove difficult to regain.
FTSE 100 hits record high as BP shares surge
Britain’s blue-chip share index has just hit a new alltime high, despite trade war worries.
UPDATED: The FTSE 100 index has touched 8,770.08 points, three point above the previous intraday high set last week when the Bank of England cut interest rates.
The rally is being driven by BP, whose shares are up over 7% after activist investor Elliott Investment Management took a stake in the UK oil company.
McDonalds hit by fall in US sales
Fast food giant McDonalds has reported a drop in sales in the US.
Like-for-like sales at American stores fell by 1.4% in the last quarter of 2024, the company reports.
The drop in sales is due to customers buying less at the till.
McDonalds says:
Comparable sales results for the quarter reflect a decline in average check, partly offset by slightly positive comparable guest counts
Global comparable sales increased by 0.4%, despite a fall in sales in some markets, “led by the UK”.
Bloomberg Economics have calculated that South America, Africa and southern Asia face the greatest shock if President Donald Trump makes good on his pledge for reciprocal tariffs.
Senior economist Maeva Cousin found that such tariffs “would be particularly painful for a number of emerging and less developed economies.” – because they currently impose higher tariffs than the US.
In contrast, she writes:
“Most advanced economies, in particular in Europe, apply tariff rates on US goods that are, on average, relatively close to tariffs applied to their own exports.
Still, there could be areas of tension, notably on agricultural products and cars.”
Here’s our news story about the jump in BP’s share price today:
Shares in European steelmakers have fallen today, in anticipation of new tariffs on their products at the US border.
ArcelorMittal, the Luxembourg-based multinational steel manufacturing firm, are down 2%.
German industrial engineering and steel production multinational ThyssenKrupp’s shares are down 0.8%.
Over in South Korea, Hyundai Steel’s share price dropped 2% today.
