UK steel industry fears ‘devastating blow’ from Trump tariffs, as Brussels vows to protect EU’s interests – business live

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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.”

More here.

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.

US steelmakers shares set to jump

Shares in US steelmakers are ralling in pre-market trading, as investors anticipate new tariffs on foreign imports of metal.

Cleveland-Cliffs, the American steel manufacturer based in Cleveland, Ohio, are up over 8% in premarket trading, as are Nucor Corporation, another large steel producer which also makes recycled steel.

Alcoa Corp, the aluminium producer, are on track to jump 5% when Wall Street trading begins in two hours.

New tariffs will make it harder for overseas companies to sell lower-priced steel on the U.S. market, supporting domestic producers. US steel makers could also potentially hike their own prices, to take advantage of the fact that overseas steel will cost more once it incurs a tariff too.

A spokesman for UK prime minister Keir Starmer has told reporters that Britain has not seen details of Donald Trump’s proposed steel and aluminium tariffs.

The spokesman says that while it was not possible to speculate on the impact of such tariffs without seeing details, Britain always prepares for all developments, saying:

“I haven’t seen any detailed proposals following reporting overnight, but we will obviously engage as appropriate.”

Europe: We will react to US tariffs

The European Union is signalling to the US that it would react to protect EU interests after US president Donald Trump’s announcement of impending metals tariffs.

However, Brussels is not responding until it has clarification about what the US plans too do.

In a statement, 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.”

A European Commission spokesperson has told reporters today that the reciprocal tariffs proposed by Trump are also unjustified, saying:

“We believe that none of the potential measures outlined by the U.S. administration to date are justified.”

Trump indicated last weekend that he will announce reciprocal tariffs on Tuesday or Wednesday, under which the US would raise trade levels to the same level as it faces on its exports to other countries….

Community union: US needs UK's specialist steel

Community, the union for the UK steel union, are also very concerned about the prospect of new US tariffs on steel.

Alasdair McDiarmid, Community’s assistant general secretary, says new levies hit import of British Steel could hurt America:

“While we await full details and a formal policy announcement, the comments from the White House regarding new tariffs on steel are extremely concerning.

At a time of uncertainty for the sector, a punitive new tariff on UK steel exports would be hugely damaging and threaten jobs. 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.

Again, this just reinforces the need for a strong UK Carbon Border Adjustment Mechanism and for robust new measures to be put in place when existing safeguards expire to shield our steel sector from a surge in cheap imports.”

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…

Ed Davey seeks crisis talks about Trump tariff threat

Liberal Democrats leader Sir Ed Davey is urging Prime Minister Keir Starmer to hold crisis talks with the leaders of Scotland, Wales and Northern Ireland to discuss the tariff threat from Donald Trump.

He said:

“Donald Trump’s latest threat of tariffs will plunge many into deep uncertainty – not least those working in our great British steel industry.

“Keir Starmer must immediately call a Four Nations summit with leaders across the United Kingdom, to agree a joint plan to protect our economy from Trump’s damaging trade war.”

Trump tariffs on steel and aluminium sold into the US is negative for markets on two levels, says Russ Mould, investment director at AJ Bell.

“First, it suggests the new US president has only just got started with America’s budding protectionist trade policy. Second, it extends the affected countries beyond Canada, China and Mexico to places like Germany, Brazil, Japan and South Korea.

“With the promise of further tariffs later this week, Trump’s actions threaten to cause considerable volatility on the markets over the coming days if there is a tit-for-tat response from affected countries.

“While stocks in the firing line such as ArcelorMittal and Hyundai Steel fell on the news, another part of the commodities sector enjoyed a bounce around speculation that activist investors were targeting the oil and gas space. Talk that Elliott had taken a stake in BP drove shares in the UK oil and gas giant up 7.5%, which in turn gave a 0.4% boost to the FTSE 100.”

MPs demand answers about Bank IT shambles

After a series of banking IT failures which have disrupted services for customers over the last couple of years, MPs are demanding answers.

Parliament’s Treasury Committee have wrtten to the bosses of the nine largest UK banks and building societies, asking how much disruption their customers have suffered over the last two years.

They also want to know how many customers were affected, and the amount of compensation that has been paid.

The letter comes after Barclays suffered an IT glitch that lasted for several days, during which time some customers saw outdated balances, or could not see their latest payment.

Chair of the Treasury Select Committee, Dame Meg Hillier MP, says:

“When a bank’s IT system goes down, it can be a real problem for our constituents who were relying on accessing certain services so they can buy food or pay bills.

For it to happen at a major bank such as Barclays at such a crucial time of year is either bad luck or bad planning. Either way, it’s important to learn what has happened and what will be done about it.

The rapidly declining number of high street bank branches makes the impact of IT outages even more painful; that’s why I’ve decided to write to some of our biggest banks and building societies.”

As tariffs are inflationary, they may make it harder for the US central bank to lower interest rates this year.

Currently the financial markets expect just one rate cut from the Federal Reserve during 2025, currently expected by July.

Enrique Diaz-Alvarez, chief economist at global financial services firm Ebury, reckons the relative strength of the US economy will also make cuts to borrowing costs harder to justify.

“Trying to predict the next tariff update to hit the newswires is a bit of a fool’s errand, so it is perhaps more productive to focus more on the macroeconomic backdrop.

“Last week’s nonfarm payrolls report was, once again, consistent with a US labour market that remains strong. Companies continue to create jobs at a healthy clip, the unemployment rate is hovering around levels consistent with full employment, and the report showed a surprise uptick in wages in January - monthly earnings rose at their fastest pace since mid-2023.

“All of this positive economic news, plus the looming threat of price hikes from Trump’s tariffs, makes it increasingly difficult to justify any further interest rate cuts at all from the Fed in 2025.

“With rates in the US remaining almost the highest in the G10, we think that it will be difficult for the dollar to sell-off in spite of its admittedly very expensive levels.”

BP shares hit six-month high after Elliott builds stake

Shares in oil giant BP have hit a six-month high after activist investor Elliott Management took a stake in the company.

Traders are calculating that Elliott will push for an overhaul of BP’s strategy, and a shake-up of its board which could claim chairman Helge Lund.

BP’s shares are up 6.35% at 460.70p, the highest since last August, after Elliott’s stake was reported on Saturday.

BP shareholders may be impatient for improvement, as Richard Hunter, head of markets at interactive investor, says:

The shares have drifted by around 3% over the last year, in contrast to a gain of some 6% for rival Shell over that period and it remains to be seen whether this latest speculation will provide a shot in the arm for what has been a relatively disappointing period for the group of late

BP is due to release its latest financial results tomorrow, after recently setting out plans to cut thousands of jobs from its global workforce to save billions in costs and appease its worried shareholders.

BP has fallen out of favour with many investors since embarking on a plan to slash its oil and gas production in favour of spending billions on renewable energy projects…

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