Britain’s two largest steelmakers have warned that President Donald Trump’s tariffs are already causing a decline in business from American customers, with further economic damage expected in the months ahead.
Tata Steel, which operates from Port Talbot, and British Steel, which runs the Scunthorpe steelworks, say the 25% tariff on British steel and aluminium exports to the US has “spooked customers” and is forcing them to seek alternative suppliers.
In a hearing before MPs on the trade and business select committee, industry leaders expressed concerns not only over lost orders but also the wider consequences of the tariffs. With large volumes of steel previously bound for the US now flooding the global market, Britain’s domestic industry could face a surge of cheap imports, further squeezing profitability.
Rajesh Nair, chief executive of Tata Steel UK, told MPs that American buyers are already backing away from British suppliers.
“They are saying they want to cancel orders and in some cases are asking for compensation on potential orders,” Nair said. “US customers are going to other suppliers to make sure they do not get caught in this tariff warfare.”
British Steel’s chief commercial officer, Allan Bell, described similar challenges, warning that some American clients were moving quickly to find domestic alternatives.
His company sells around 50,000 tonnes of steel products to the US each year, often in specialist components where they hold sole-supplier status. However, that position is under threat.
“[US customers] are considering order cancellations,” Bell said. “Where there are other domestic producers, we have exited that business immediately. Other customers are worried about the impact of tariffs.”
He added that some US firms are developing new tooling capabilities to replace British Steel’s products, meaning the full damage could be felt within the next nine months.
While immediate order cancellations are a concern, industry leaders argue that the real threat comes from the knock-on effect of Trump’s tariffs on global steel markets. With European and Asian steel producers now locked out of the US, vast quantities of surplus steel are likely to be redirected elsewhere, raising fears that Britain’s market could be swamped with low-cost imports.
Nair stressed that the wider consequences would be “a huge impact on the top line of the business and a massive impact on profitability, more damaging than just the volume loss.”
Bell echoed the warning, calling for urgent government intervention. “The indirect impact of potential diversion [of steel bound] for the US market into the open market is our biggest concern, and that is where we must take measures to protect.”
MPs heard that the European Union has already moved to shield its steel industry from the expected influx of redirected exports, heightening concerns that Britain could become an easy target for excess supply.
Bell urged the UK government to act swiftly: “We would like to see swift action because we are seeing swifter action across the EU. We would absolutely like the government to move faster on safeguarding measures.”
With Britain’s steel industry already struggling with high energy costs and global competition, Trump’s tariffs add yet another layer of uncertainty. Industry leaders warn that without immediate action, the sector could suffer long-term damage, as foreign competitors move in to take market share once held by UK manufacturers.
