US, UK reach trade deal, removing Section 232 tariffs on British metal
Published by:Amy Hinton<>,David Bartle<>
8 May 2025 @ 22:16 UTC

A new US-UK trade deal removes Section 232 tariffs on UK imports of steel and aluminium, which market participants said was encouraging for addressing transshipments from China. The White House announced a trade deal between US President Donald Trump and UK Prime Minister Keir Starmer in a statement on Thursday May 8.Automotive tariffs for UK vehicle imports have been cut to 10% for the first 100,000 vehicles imported into the US — the current standard reciprocal tariff rate — with any subsequent imports still subject to a 25% duty.
It is understood that the 10% reciprocal tariff levied on material imports outside of Section 232 will still apply, meaning that scrap imports into the US from the UK still incur that duty.
The material implications of the agreement from a metals perspective were described as minimal by market participants across the aluminium, steel and scrap markets, given that the UK is not a significant exporter of those units to the US.
A failure to announce a trade deal with China or to secure trade partners among other Asian nations has made it critical for the US to make headway in another direction, sources told Fastmarkets.
Nonetheless, the deal with the UK has been instrumental in establishing the parameters of what elements of the original tariff package are open for renegotiation, namely automotive tariffs and Section 232, those same sources reiterated.
Tariffs on exports of UK steel and aluminium to the US were imposed on March 12. The US has since recognized the economic security measures taken by the UK to combat global steel excess capacity and will negotiate an alternative arrangement for steel and aluminium, the White House said, forging a deal that will create a new trading union for the metals.
The UK exported around 180,000 tonnes of semi-finished and finished steel to the US, worth £370 million ($492 million), in 2024, according to UK Steel. This accounted for 7% of the UK’s total steel exports by volume and 9% by value.
The outcome was hugely significant for the British steel sector, UK Steel said in a statement. The British trade association said the US is the UK’s second most important export market for steel, after the EU.
US exports to the UK consist mostly of specialist steel for defense, oil and gas, construction equipment and packaging applications.
The trade association said the removal of tariffs offers some respite amid challenging market conditions, citing global overcapacity and oversupply, high energy costs and weak demand.
The US’s largest sources of aluminium are Canada, the United Arab Emirates and China. In 2024, the UK was the 26th supplier of unwrought aluminium, not alloyed, and aluminium alloys, unwrought — representing 0.004% of US imports — according to data from the US International Trade Commission’s DataWeb.
The Aluminum Association is encouraged by today’s announcement. While the aluminium trade between the US and the UK is negligible (~0.1% of all aluminium imports into the US come from the UK), the White House promised an ‘alternative arrangement to the Section 232 tariffs on steel and aluminium’ creating ‘a new trading union for steel and aluminium,’ Aluminum Association chair and chief executive officer Charles Johnson said in a statement to Fastmarkets.
This may provide a framework for tailored trading arrangements that allow the US to combat unfairly traded Chinese aluminium in global markets while providing the flexibility needed to secure abundant, affordable metal to support more than $10 billion in industry investment made in recent years. We look forward to working closely with the White House on these plans as negotiations continue and appreciate President Trump’s continued support for a strong US aluminium industry, Johnson continued.
A European trader told Fastmarkets they do not see much impact on the European aluminium market as the UK is not a large exporter of aluminium.
It could send a positive message to the world to some extent that certain countries could get a good outcome from their negotiations with the US, a second trader source said.
The second trader said Trump is very unpredictable and he could change his mind any minute.
The US-UK deal demonstrates that the Trump administration is willing to work out ‘alternative arrangements’ with countries that are willing to address transshipment of China-manufactured steel, Dan Ujczo, senior counsel, international trade and transportation at Thompson Hine, told Fastmarkets.
This will be a reset of any quotas and the imposition of monitoring and reporting systems. It bodes well that the steel and aluminium tariffs are tactical to achieve specific results against China as opposed to permanent tariffs for most countries. Nevertheless, managed trade is the order of the day in the steel and aluminium sectors, Ujczo continued.
Vogel Group managing principal Samir Kapadia told Fastmarkets the US-UK deal was a surprise.
Steel and aluminium have been a no-fly zone for the White House as it related to reducing and/or eliminating tariffs. I don’t think the industry will be happy about this at all, despite the low volumes, Kapadia said.
It sets an odd precedent and counters much of the work done at the outset of the administration on eliminating tariff rate quotas and other exemptions. But it might show that the White House believes that the UK isn’t the problem in the global steel market. I highly doubt Canada, Mexico, Brazil and China will get similar relief, Kapadia continued.
Unite, one of the largest trade unions in the UK and Ireland, welcomed the agreement in a statement. The union also advocated for more political action in the UK, such as reducing industrial energy costs and designating steel as critical national infrastructure area to promote British industry. Alcoa chief executive officer William Oplinger, who asked Trump for a tariff exemption in March, said high energy costs have kept the US aluminium industry from being globally competitive.
Rather than being buoyed by the new trade agreement, the US recycling industry remains preoccupied by the potential for the European Commission to retaliate against the Trump administration’s reciprocal tariffs.
ReMA has significant concerns with the proposed retaliation that the European Commission has released that would not only target US exports of certain recycled materials but also seeks to impose export restrictions on EU recycled steel and aluminium products, the Recycled Material Association’s vice president of International Trade and Global Affairs Adam Shaffer told Fastmarkets.
The US is a net exporter of these two recyclable commodities to the EU, but the US also imported over $150 million in recycled steel and aluminium last year, so the combination of both import tariffs and export restrictions would be particularly disruptive for recyclers and manufacturers, Shaffer continued.
We look forward to engaging with the Trump administration to ensure that trade in recycled materials is not significantly impacted by the potential EU retaliation, Shaffer said.
Alesha Alkaff in Boulder, Colorado, contributed to this article.