United States Tariffs: Steel and Aluminium

Report stage: House of Commons
Monday 12th March 2018 Commons Chamber

19:05

[The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)]

On Thursday 8 March, President Trump announced that the United States would impose a tariff of 25% on steel imports and a 10% tariff on aluminium imports after a period of 15 days, with the final day being 23 March. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, have been exempted from the tariffs, subject to the successful conclusion of the NAFTA negotiations. For the products within the scope of the investigation, in 2017, the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. In addition, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports in tonnage, at a value of £360 million and £29 million respectively. The President outlined that there is scope for further countries and certain products to be exempted from the tariffs.

From a UK perspective, as Members of this House know, the UK and the US are strong partners and allies, and the US-UK economic and security relationship is crucial. The US is our largest single-nation trading partner and accounts for a fifth of all exports, worth more than £100 billion a year. It is also the top destination for outward direct investment by the UK and the single biggest source of inward investment into the UK. We have a long-standing and special relationship with the US; however, that does not mean that if we disagree with something, we will not say so, and we do disagree with the US decision to implement tariffs on steel and aluminium imports based on national security considerations. Such unilateral trade measures have weak foundations in international law and are not consistent with the Department of Defence’s own judgment in an investigation that was conducted on the basis of national security.

There is undoubtedly a problem of overcapacity in the global steel market, but our strong view is that a global problem requires a global solution, not unilateral action. The UK has worked hard to address the issue of overcapacity. The Prime Minister called for a forum of G20 members to tackle this issue, which my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy attended in Berlin in November; the forum agreed comprehensive policy solutions. Most recently, the Prime Minister raised it during her visit to China, which is the world’s leading producer of steel and aluminium products. The UK will continue to work within the rules-based international trade system to tackle this problem.

Since the President asked the Department of Commerce to launch the investigation into the national security impact of steel and aluminium imports last April, the Government have made clear to the Administration on repeated occasions the potentially damaging impact of tariffs on the UK and the EU steel and aluminium industries. The Prime Minister has raised her concerns directly with President Trump. I have spoken on several occasions to the Commerce Secretary and to the US trade representative about the investigation, including this afternoon. I spoke again today to the director general of the World Trade Organisation, Roberto Azevêdo, and I regularly speak to the EU Trade Commissioner, Cecilia Malmström. Several of my Cabinet colleagues have raised this issue with their opposite numbers. The Government have worked closely with the EU as part of our unified response. In addition, I assure right hon. and hon. colleagues that we have been in regular contact with the UK steel and aluminium industry throughout. I spoke to Gareth Stace at the weekend and again this afternoon.

There are two routes to petition the US for exemptions from the tariffs. The first, overseen by the US trade representative, will exempt countries with which the US has a strong national security relationship and which agree alternative means to address the threat to US national security from the relevant imports. The second, overseen by the Department of Commerce, will evaluate product exemptions if it is deemed there is no domestic US alternative and there are national security considerations, but only after a request for exclusion is made by a directly affected party located in the United States.

The Department for Business, Energy and Industrial Strategy will be assisting UK industry in working with US customers to build their cases for the exemption of individual products. I will be travelling to Washington this week for face-to-face meetings with the US trade representative, Ambassador Lighthizer, and Commerce Secretary Wilbur Ross as well as leading members of Congress. I will be making the case for the UK as part of the EU. We have a strong defence and security co-operation relationship. As close allies in NATO, permanent members of the UN Security Council and nuclear powers, close co-operation between the UK and the US is vital to international peace and security.

As the House is aware, our current membership of the European Union means that the European Commission will be co-ordinating the EU response, and we have been clear that we will continue to adhere to the duty of sincere co-operation. The EU response is focused on three possible areas. First, the European Commission is preparing to introduce immediate duties on the US ahead of a World Trade Organisation dispute. The EU has shared a draft list of proposed items for duties and we expect it to publish this list early next week. Secondly, the EU can apply a safeguard measure of its own to protect the steel and aluminium industries from being damaged by an influx of exports to the EU caused by the displacing effect of US tariffs. Thirdly, the EU can pursue a dispute at the WTO. We are currently evaluating all aspects of these responses together.

We are clear that it is right to seek to defend our domestic industries from the direct and indirect impacts of the US tariffs, protecting both jobs and industrial capacity. We will also press for any response from the EU to be measured and proportionate. It is important that the UK and EU response works within the boundaries of the rules-based international trading system. Over the coming days, we will be working closely with British industry and the EU to seek swift clarification and mitigation. I commend this statement to the House.

19:12

[Barry Gardiner (Brent North) (Lab)]

I thank the Secretary of State for advance sight of his statement and for his telephone call over the weekend.

The world steel industry is on the verge of a crisis. In our domestic industry, 32,000 workers in the steel industry are facing an existential threat to their jobs. Many of those men and women are angry that it has taken the Secretary of State more than 10 days since President Trump’s initial announcement to come to this House and make a statement about the impact that this might have on their communities and what measures the Government are taking to protect their livelihoods. They expected better, and they had a right to do so, but I assure the Secretary of State that, for our part, the official Opposition will not seek to make this issue one of party political point scoring. Everyone in this House must work together. We will be constructively critical where we consider the Government can do better, but our fundamental position will be to work with the Government to achieve the best outcome for our steel communities, for our aluminium industry and for our wider economy.

The Secretary of State is correct that the fundamental cause of this crisis is overcapacity in the global market and a long-standing failure by Governments around the world to tackle dumping and unfair practices, but he should have acknowledged that this included his own Government. We have not forgotten that it was the Conservative Government in 2016 who sought to block EU plans to impose tougher tariffs on aggressive Chinese steel imports. Global over-supply has seen other countries dump their surplus—a surplus often created by actionable subsidies and lax enforcement of labour standards and workers’ rights—at less than market value.

Although the global situation has not been created by President Trump, the manner in which he has gone about trying to resolve its impact on US producers is fundamentally wrong and threatens to tip a very bad situation into a full-scale global trade crisis. The application of 25% tariffs on steel and 10% on aluminium imports into the United States is unjust and unjustifiable. The suggestion that such tariffs are necessary under section 232 to mitigate a threat to American national security is patently false. The US Secretary of Defence himself has publicly stated that US military requirements represent no more than 3% of US steel production and that the Department of Defence is able to acquire the steel and aluminium it needs for US national defence requirements. The UK steel industry has made it clear that the amount of UK steel exports to the United States military industrial complex is “very small indeed”.

The Secretary of State says that Trump’s tariffs have weak foundations in international law. In fact they have none. The truth is that the President is seeking to bully and threaten his trading partners to bring them weakened to the negotiating table. The temporary exemption for Canada and Mexico, making their position subject to a renegotiation of NAFTA that is favourable to the USA, is just one example. He is doing the same with the UK and Europe, where he wishes to reverse the US trade deficit.

Given that the Secretary of State accepts that the tariffs are unjustified, I ask him to consider that the two routes he outlined for petitioning for exemptions from them is to act as if they have a spurious legitimacy. This is precisely the trap that President Trump has set: “Negotiate with us and we will not bully you further.” In the part of Glasgow where I grew up, that was called a protection racket. If the Secretary of State does go down this route of trying to secure an exemption, will he give a commitment now to be totally transparent about any price that he has to pay and any assurances that he has to give to the US Administration in order to get it? It is reported that, following the Australian Foreign Minister's meeting with Rex Tillerson, these tariffs may not be applied to Australia. However, it has also been reported that Australia has had to concede to American demands for a bilateral security agreement, which would see Australia forced to commit to greater military spending. Will the Secretary of State also be clear about how any such attempt by the UK to secure an exemption sits with the duty of sincere co-operation, to which he rightly referred in his statement?

President Trump is imposing these tariffs on national security grounds precisely because, under WTO rules, this means that article 21 of the General Agreement on Tariffs and Trade would not apply. This specifically prevents member states of the WTO from demanding clarity on the grounds of such pronouncements and prevents them from commencing dispute proceedings or taking retaliatory action. The President is seeking to undermine the multilateral rules-based system of the WTO, to which he has long been opposed. He has said that he would welcome a trade war and thinks that America could win it. He cares nothing for the viability of UK producers who have respected the rules. He is treating them no differently from their competitors who have not. As the US market closes to our exports, countries that would otherwise export into the US will seek to divert their production to the UK, which will tend to undercut domestic producers here even further.

What action is the Secretary of State taking to defend against this trade divergence? He must recognise that our industry is particularly vulnerable because we have a Government who pride themselves on taking the weakest possible approach to remedying unfair practices by their adherence to the lesser duty rule. Both the Trade Bill and the Taxation (Cross-Border Trade) Bill currently going through Parliament were opposed by the Labour party precisely because they proposed to create what the Manufacturing Trade Remedies Alliance described as

“one of the weakest trade remedy regimes in the world.”

Will the Secretary of State say whether he will consider tabling Government amendments to strengthen both the statutory representation function of the Trade Remedies Authority and the powers available to it, in line with the amendments proposed by the Opposition in Committee?

The Secretary of State spoke of the retaliatory measures that the EU Commission is preparing. What assessment has his Department made of the legal rights to recourse under article 8 of the WTO agreement on safeguards and what representation has he made to the European Commission’s Directorate-General for Trade in relation to these measures? Is he persuaded that they would be lawful? Is he persuaded that they would be effective?

The Secretary of State is fond of painting international trade as a balance of consumer and producer interests. The fear of thousands of steel and aluminium workers in the UK is that he naturally leans too far in favour of lower prices for the consumer. He needs to prove to them that he will stand up for British industry, for their jobs and for their communities. They need confidence that he will tackle unfair practices that distort the market. If he does, he will have the Opposition’s full support.

[Dr Fox]

I am grateful to the hon. Gentleman for his co-operation over the weekend and for some of the constructive suggestions he made about how we might apply some further pressure to those US producers to enable them to seek exemptions for imports from the UK. He is right that there is overcapacity. The G20 global forum on steel excess capacity has made 28 recommendations. We now wait to see whether China will implement those recommendations, which is the key to sorting out the global overcapacity issue.

We have regularly said that we do not believe that section 232 was an appropriate vehicle for carrying out this investigation. Not only does the UK send some specifically high-end steel products into the United States that the US market is not necessarily able to provide for itself, so tariffs will apply an unavoidable increase in cost to American inputs, but we sell some specialist steel into the American military programme, making action taken against the United Kingdom on a national security ground quite an absurdity.

The hon. Gentleman is right to mention the sincere co-operation. I have made it very clear to the Commission that we continue to operate on that basis and that we will replicate the EU’s trade remedies systems as we leave the European Union. I remind him, though, that the Labour party voted against the setting up of the Trade Remedies Authority, not the issues that relate to its operation. That was a dangerous thing to do. However, it is right that we regard this as a national issue. There is no fundamental difference between us on the basis on which the section 232 investigation was conducted, nor on the options that we believe the European Union should take as a response.

[John Redwood (Wokingham) (Con)]

Will the Secretary of State stress to the EU that it is in our interests to try to take some of the tension out of this festering dispute, rather than to take it on to another height, given that the President is already talking about tariffs against German cars, for example? It is surely in our interests to get back to tariff-free or low-tariff business.

[Dr Fox]

The EU is taking countermeasures because the EU views section 232 itself as a safeguard. Any action that the United States were to take in response to that would be completely out of line with international trade law, as well as exacerbating an already tense situation.

[Hannah Bardell (Livingston) (SNP)]

This really is a blow to those right-wing, free-market Brexiteers who argue that the US will welcome a trade deal with open arms. Anyone looking at the somewhat unhinged tweets coming out of President Trump’s office will tell us otherwise. Given the Secretary of State’s nationality and where he was brought up, I am interested to know whether he has raised the matter specifically of Scottish steel and aluminium, and the steel industry’s impact on all nations of the UK. It was in 1992 that his Conservative Government closed Ravenscraig in Scotland, decimating 1,200 jobs and livelihoods, and it was the Scottish National party Government in Scotland who brought back into production the steelworks in Clydebridge and Dalzell and the aluminium smelter in Lochaber. We are fed up in Scotland with clearing up his Government’s mess and we do not want to have to do it again.

We know from recent reports in the press that the geographical indicators of products such as Scotch whisky could be under threat in a US-UK trade deal. The Secretary of State may have seen the article in The Scotsman last week suggesting that Scotch whisky is

“among the products that could carry a ‘Made in America’ tag after Brexit.”

It further said:

“US lobbyists are calling for the UK to drop geographical name protections after Brexit to allow supermarkets to import American copies.”

That would be outrageous.

Will the Secretary of State commit to protecting our valuable steel and aluminium industries and not to trading off our vital GIs for Scotch whisky in any trade deals? Given that a Tory Brexit would reduce UK GDP by 8% and put at risk some of our key exports, will he finally reconsider his approach to Brexit and admit that he was wrong in suggesting that leaving the EU single market and customs union could somehow be overcome by magical trade deals with the US and the EU that were going to be, in his words, the “easiest in human history”?

[Dr Fox]

It is not long since I remember the SNP being delighted at some of Mr Trump’s tweets, when he was having some of his relationships with the previous SNP leader.

We can best tackle this issue as a united United Kingdom in line with our European Union partners. The hon. Lady dares to raise the issue of GI. These matters are in the roll-over of the EU trade agreement for which we are trying to get continuity in our current Trade Bill and the customs Bill. She needs to understand that she actually voted against the roll-over of those Bills that would have given the very protections for which she is asking.

[Julia Lopez (Hornchurch and Upminster) (Con)]

In its condemnation of President Trump’s proposed steel tariff, the EU has implicitly accepted that it would be a similarly retrograde step to impose tariffs or engage in retaliatory measures with key trading partners. How will my right hon. Friend be using the President’s announcement to make the case for open frictionless trade with the EU post Brexit and to assert the UK’s position as a leading proponent of free trade in the 21st century?

[Dr Fox]

We are seeing the sort of problems that come from introducing protectionist measures. Tariffs will very seldom—for any length of time—successfully protect a domestic industry. They are likely to add cost to the inputs for that economy. In the United States, where 140,000 people are employed in the production of steel, there are also 6.5 million people in industries dependent on steel usage who will not be helped by an increase in the price. My hon. Friend makes a good point. We should all be recommitting ourselves to an open, liberal, global trading system, rather than considering impediments to it.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

If the Secretary of State wants to rebuff Donald Trump’s claim that these tariffs are for national security reasons, he need only look at the President’s tweet from six hours ago, in which he starts off down the avenue of saying, “Oh, what about European farming tariffs or manufacturing tariffs?” It is quite clear that the Secretary of State and the European Union should be able to drive a coach and horses through the national security nonsense that the American President is putting up. Will the Secretary of State at least see this as an opportunity for us to work with our partners in the European Union and to use the leverage that we have in that alliance of 500 million customers to ensure that the Americans cannot walk all over us?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. A load of constituencies are affected. May I suggest that we have short answers and short questions, so that hon. Members can get in?

[Dr Fox]

We will work with our partners in the European Union because we are under a duty of sincere co-operation and because it makes sense to do so, but many other countries that are not members of the European Union are affected, and they will also make their voices known.

[Iain Stewart (Milton Keynes South) (Con)]

My right hon. Friend has rightly mentioned that many of the UK’s exports are very high value and specialised and that many of the supplies go to the United States military. Does he have an opinion at this stage whether the product exemption or the country exemption route offers the best hope for gaining an advantage for the United Kingdom?

[Dr Fox]

My hon. Friend asks a very good question, but it is difficult to answer until we can explore in greater detail with the US authorities exactly what the details will mean. In any case, whichever routes are the best to gain exemptions for the United Kingdom and the European Union are the ones that we want to follow.

[Catherine West (Hornsey and Wood Green) (Lab)]

What is the Secretary of State’s view on comments in the past 10 days regarding a tit-for-tat approach—for example, with peanut butter, cranberry juice and other products that are consumed here? Is this a good and sensible approach?

[Dr Fox]

The hon. Lady asks a good question. As I said, the EU intends to impose countermeasures under article 8 of the World Trade Organisation safeguards agreement, because it believes that section 232 itself is a safeguard. The EU is therefore entitled to respond to that. Let me say, though, that this constant upping of the ante regarding what may happen and what countermeasures may be taken is not a sensible way for us to approach global trade. If she is suggesting that it would be wise for everyone to keep the temperature down, I entirely agree—100%.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I welcome the Secretary of State’s statement in terms of its content and its tone. Free trade is about being free to trade within the agreed rules; it is not about a free-for-all. May I strongly encourage him to reiterate that message both to the United States and to China?

[Dr Fox]

I take every opportunity to do so. It is worth remembering that we have in the United States a number of those who very strongly agree with us, not least inside the American business lobby, many of whom may be harmed as a result of the measures that may be undertaken. We also have very strong and vocal allies in the US Congress, and I very much welcome them making their voices known in recent days.

[Anna Turley (Redcar) (Lab/Co-op)]

I would be very concerned if the Government were pinning all their hopes on an exemption either for the UK or for the European Union, because there will still be a substantial knock-on effect of further dumping on our shores by the countries that behave badly when they are shut out of the US. Has the Secretary of State done an impact assessment for the British steel industry on the knock-on effect of further global overcapacity as a result of these tariffs?

[Dr Fox]

We are working alongside the industry to look at that. My colleagues in the Department for Business, Energy and Industrial Strategy are engaged in that work. The hon. Lady knows that Skinningrove is a very good example of what I was discussing earlier. It is one of the areas where we make specialist steel that goes into the US programme, so the concept that we should be taken to task on a national security basis for providing the US with something that it needs for its own security programme does not make much sense.

[Adam Afriyie (Windsor) (Con)]

It seems to me that tariffs and protectionism fundamentally undermine the industries that they seek to protect. Can the Secretary of State confirm that it remains the British Government’s position that we are committed to world-wide free trade? Will he be seeking in some way to gain a bilateral opt-out from these tariffs as soon as we are able to do so?

[Dr Fox]

As I have said, we will work alongside the European Union because we have a duty of sincere co-operation for as long as we are members. I have often taken the view that it is strange that people should want us to obey the rules when we want them and not when we do not want them. We have a legal duty as EU members to fulfil this. We intend to do so, and we will work with our EU partners accordingly. As a country—this has been true under Governments of both colours—we have believed in free trade. We have been a global champion of free trade. Let us remember that free trade is the means by which we have taken 1 billion people out of abject poverty in a generation, and we as a country should be very proud that we have been in the lead in that.

[Sir Vince Cable (Twickenham) (LD)]

Can the Secretary of State give us some examples of how he has been able to use our close and special trading relationship with the United States to develop his vision of an open, liberal, multilateral trading system?

[Dr Fox]

As the right hon. Gentleman knows, we are unable to conduct an independent trade policy for as long as we are members of his beloved European Union. We have a trade working group with the United States. We are looking at short-term liberalisation. We are looking at the areas that we might look at in a future free trade agreement. We are looking at co-operation in the WTO when we leave. As he sits and looks, for some reason, very smug, he would do well to remember his comments from yesterday, which were as mean-spirited as they were wrong in substance.

[Crispin Blunt (Reigate) (Con)]

I congratulate my right hon. Friend on his answer to the right hon. Member for Twickenham (Sir Vince Cable).

My right hon. Friend says that when he goes to the United States, he will meet members of Congress. Will he continue to build the case with our Republican friends in Congress for the open, liberal trading system that we all support—on both sides of this House—to make sure that this can be delivered once we are out of the European Union?

[Dr Fox]

I would just correct my hon. Friend a little. We are not just talking to Republican members of Congress; there are very strong Democrat elements that are also in favour, and have long been in favour, of free trade. It is very important that in this country, in the United States and elsewhere, we work with like-minded people who believe in genuinely open, liberal global trade to achieve the ends that we have in common.

[Jessica Morden (Newport East) (Lab)]

The recovery that we have seen in our steel industry has been fragile. We are facing, as my hon. Friend the Member for Redcar (Anna Turley) said, not only the direct impact of tariffs on our exports but the indirect effects of other countries finding a home for displaced steel. The Government have been slow to act during the steel crisis in the recent past. Can the Secretary of State assure my steelworking constituents that the Government will do everything they can to fight for our industry at this time?

[Dr Fox]

As I made clear, the EU will impose countermeasures because it believes that what we are witnessing is a safeguard. We believe that that is not justified by the section 232 case on national security. We will, alongside the EU, take whatever measures are required to ensure that that is dealt with.

[Michelle Donelan (Chippenham) (Con)]

What steps is the Secretary of State’s Department taking to ensure that the UK can protect British businesses in all sectors from unfair trading practices once the UK leaves the EU?

[Dr Fox]

We touched on that earlier. We will do that by replicating the trade remedies measures that exist. To do it, however, we have to set up a Trade Remedies Authority under the Trade Bill that is currently going through the House. I hope that the Opposition parties will look again at their rather inexplicable decision to vote against the setting up of a Trade Remedies Authority.

[Hannah Bardell]

On a point of order, Mr Deputy Speaker.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Unfortunately points of order come at the end of the statement.

[Nic Dakin (Scunthorpe) (Lab)]

In 2002, when the US Administration last did this, US economists estimated that it cost the US economy 200,000 jobs, and the Administration had to back down when the EU took them to the WTO. Will the Secretary of State reassure this House, and steelworkers in my constituency and elsewhere, that the UK will argue for the strongest possible safeguard measures within the EU’s response?

[Dr Fox]

We hope that we can persuade the United States of an EU exemption so that we do not need to go down this particular route. I hope that sense will prevail. The hon. Gentleman is quite right to raise the 2002 issue. At that point, there was a great deal of activity where an alliance between the free trade elements in Congress and the business community in the United States came together to change the mind of the Administration at that time. I hope that such a combination would be successful this time.

[Paul Masterton (East Renfrewshire) (Con)]

As we have heard, President Trump’s announcement has caused widespread concern within America itself. What steps will the Government be taking to exert pressure on President Trump not only from the outside, as part of the EU, but from the inside, in terms of the American political and trading establishments?

[Dr Fox]

As I have said, there is a great deal of opinion inside Congress, within both parties, that this is a mistaken route to take. In recent days, I have had discussions with, for example, Paul Ryan on this very subject. We should be trying to mobilise all the allies we can. I mentioned earlier the co-operation from the hon. Member for Brent North (Barry Gardiner). It is very important that we deal with this not just politically and through business, in that there is a role for the trade unions to play in talking to their opposite numbers in the United States where industries that are users of steel could potentially be damaged should the price of that steel rise as a result of tariffs. We can take a multi-layered approach to dealing with this issue, and we have a duty to use every one of the levers that we have.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Diversionary dumping is also the crucial issue for steelworkers at the Celsa plant in my own constituency. Does the Secretary of State not find it ironic that he is talking about the importance of working together across the EU to put in place the safeguards that are so necessary while at the same time advocating pulling us away from that and swimming against the tide alone? When he is speaking to his US counterparts, will he remind them that every single US state lost jobs as a result of George W. Bush’s actions in 2002?

[Dr Fox]

As I have said, the EU can take counter measures on the basis that it believes that this is a safeguard. It could also make a safeguard of its own if it felt that a surge of displaced steel product was damaging our own market. I remind the hon. Gentleman that this is not just a dispute between the United States and the EU but involves all the countries in the world who are steel producers. The WTO is much bigger than the EU, and we will not be leaving the WTO as we are a founder member.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I thank the Secretary of State for referencing Skinningrove in his answer to the hon. Member for Redcar (Anna Turley), because, as he rightly says, there would be a serious threat to that plant as it produces very high-grade steel. Will he commit to all the necessary support for Skinningrove, especially given that the core products produced there for Caterpillar, an American firm, are not produced in the US market, and therefore pose no threat to US jobs?

[Dr Fox]

My hon. Friend makes an important point. The exports from Skinningrove to Caterpillar make up about 25% of the site’s output and he is right to say that US producers have poor capability in regard to this product. The application of tariffs is therefore likely to result in a rise in input costs, which would be to no one’s economic benefit.

[Nick Thomas-Symonds (Torfaen) (Lab)]

We all hope that these tariffs will not be imposed on 23 March, but if they are, what steps will the Government commit to taking in order to support steelmaking in this country and our steelmaking communities?

[Dr Fox]

That date, 23 March, is not quite the deadline that it might appear. My initial discussions with the US Department of Commerce and the Office of the United States Trade Representative have made it clear that the period of exemption will continue some way beyond the initial introduction. Clearly, if there are going to be exemptions for the EU or the UK, we would want to see them introduced as early as possible. We will continue to push for exemption on the basis that I have set out today.

[Bob Stewart (Beckenham) (Con)]

When my right hon. Friend travels to Washington later this week, will he be accompanied by representatives from Brussels? Obviously, we are still an EU member and cannot act unilaterally—yet.

[Dr Fox]

I do not require a babysitter from the EU on my visit to Washington. We are in continuous contact with Commissioner Malmström and her team, because this is an issue that affects us all. It would affect us whether we were in the European Union or not, however, because these actions are being taken not just against the EU but against all steel producers globally, all of whom will be equally affected.

[David Hanson (Delyn) (Lab)]

Did the Secretary of State, or for that matter the European Union, have advance knowledge of President Trump’s statement on 1 March? Either way, what does this say about future relationships with the President?

[Dr Fox]

I am not sure how many people, if any, had advance notice of President Trump’s initial announcement.

[Robert Courts (Witney) (Con)]

What representations has my right hon. Friend made to China with regard to tackling the global overcapacity of steel?

[Dr Fox]

As I have said, through the work that we are doing multilaterally, there are currently 28 outstanding recommendations that we expect China to apply. The Prime Minister raised this matter on her recent visit to China, and we are continuing the conversation. We understand China’s need for the production of aluminium and steel for export and for its domestic use, but if we are going to have a rules-based system, the rules need to be obeyed. They also need to be transparent, and we need to have sufficient information to determine whether the WTO rules are still effective.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

If faced with a trade war, what post-Brexit trade defence mechanisms would little Britain employ against the might of the US economy?

[Dr Fox]

As I have said, the whole aim of policy at present in the UK, the European Union and beyond is to try to temper these proposals and to get exemptions so that we do not feel any of the impetus that might lead to an escalation of the current position.

[Mrs Kemi Badenoch (Saffron Walden) (Con)]

As tariffs go, 25% is particularly high and could lead to all sorts of unforeseen consequences. Is there any evidence that there will be trade diversion to the UK as a result of the US imposition of 25% tariffs?

[Dr Fox]

It is quite difficult to know in advance where there might be diversion. Again I make the point that our aim is not to deal with the consequences but to prevent the imposition of the proposed tariffs in the first place.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State jokes that it is not clear that anyone knew about the President’s announcement before he made it, but it is worse than that. Sometimes, it looks as though the President himself does not know what he is about to announce, even when he has started to announce it. All too often, it involves a tweet in search of a policy. Are not the really disturbing matters not only the growth of protectionism in America but the false promise that it offers to some of the poorest people in the United States, who in the end will not benefit one jot from it?

[Dr Fox]

The hon. Gentleman makes an even better point than he thinks he has—[Interruption.] Or, in his case, possibly not. In recent years, we have seen a worrying trend among G20 countries to impose protectionist measures. In 2010, we saw about 300 non-tariff barriers to trade being operated by the G20. By 2015, that figure had risen to around 1,200, so there has been a gradual move away from the concept of global free trade and a temptation for countries to impose non-tariff barriers. In addition to making the economic case, we should remember that those countries that have benefited from free trade should not be pulling up the drawbridge behind them and denying those benefits to developing countries.

[Mr Philip Hollobone (Kettering) (Con)]

Is China doing anything at all to help to cut the global oversupply of steel?

[Dr Fox]

That is a discussion that we are having constantly with China. It says that it is taking measures to reduce it, but as I have said, there are 28 recommendations outstanding, and only time will tell whether we are witnessing the correct action or merely the rhetoric.

[Kate Hoey (Vauxhall) (Lab)]

Given what President Trump said during his election, none of us should really be surprised by this. If the Secretary of State does not manage to change the mind of the United States Government when he goes to Washington, and if they offer the United Kingdom an exemption, would that exemption come in from March 2019 or would it have to be subject to the almost ridiculous implementation period?

[Dr Fox]

Any exemption given by the United States will be in US law and will be determined by the US President, not by the US Congress and far less by European law.

[Rebecca Pow (Taunton Deane) (Con)]

Close co-operation between the UK and the US is vital to international peace. One route to petitioning the US for exemptions to the proposed tariffs would be to demonstrate the strong link with national security. How confident is my right hon. Friend that we can make a strong case on those grounds?

[Dr Fox]

Of course we have a strong national security linkage through our relationship in the Security Council and through being nuclear powers in the world, but it is always worth reminding our US colleagues who was alongside them in Iraq and Afghanistan and in many of the other conflicts that the United States has been involved in. The United Kingdom has never been found wanting as a loyal and steadfast partner in our bilateral security and in global security more generally.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Seeking exemptions from the US steel tariffs will not in itself protect the UK’s steel industry from dumped diverted steel from the American market. Will the Secretary of State undertake to work with the EU to ensure that whatever measures are necessary to preserve the UK’s steel industry are taken, and to work with the WTO to establish a more rational anti-dumping regime internationally?

[Dr Fox]

That is what we in the WTO are for. Its purpose is to ensure that there is a rules-based system and that the rules are applied, and that when the rules are not applied, there is sufficient mitigation to help those countries that are affected. In all the things that the hon. Gentleman has just mentioned, that is where we regard our duty as lying.

[Jack Brereton (Stoke-on-Trent South) (Con)]

As the Secretary of State will know from visiting Goodwin International in my constituency, Britain is a world leader in the specialist precision engineering of steel products. This is important not only for our British industry but for supplying US defence with equipment. How can we ensure that the US recognises that fact, so that those vital British products can continue to be exported to the States?

[Dr Fox]

The US Department of Defence has made it quite clear that it fully understands the contribution that the United Kingdom makes. Its report made it clear that it did not believe the use of section 232 was the appropriate means of dealing with concerns about global overcapacity. I hope that the good sense of the Department of Defence will be diffused throughout Washington.

[Lady Hermon (North Down) (Ind)]

May I commend to the Secretary of State the experience of Bombardier? In recent months, it risked losing thousands of jobs because of unfairly imposed US tariffs of 300%. The winning formula for defeating that proposal—and having it unanimously thrown out in the US—involved a combination of trade unions, management, local MPs and Ministers right across the Government, along with the personal intervention of the Prime Minister when she spoke to President Trump at the Davos economic summit. That strategy worked for Bombardier, so may I commend it to the Secretary of State and suggest that it is repeated in order to protect the steel industry in the United Kingdom?

[Dr Fox]

We have had, as I said earlier, a wide range of contacts in a wide range of areas. The International Trade Commission was ultimately the vehicle that sorted out the Bombardier case, so there are still in the United States those elements of an independent, free trading policy that we can rely on, on occasions when they are needed. It was not just the politics ultimately, hard though we tried for Bombardier, but the American mechanism itself—the ITC—that has a lot to be commended for.

[Kevin Foster (Torbay) (Con)]

Today it is steel and aluminium. Tomorrow it could easily be the photonics industry, which Torbay businesses that sell to the United States are part of. On Commonwealth Day, will the Secretary of State reassure me that we are also talking with our allies within the Commonwealth about what we can do to defeat a policy that will be as negative for the United States and for them as it will be for us?

[Dr Fox]

I said in an earlier answer that the people who have the most to lose if we move away from a global concept of free trade are the world’s poorest. If we genuinely want people to be able to trade their way out of poverty, they can only do it in a genuinely free trading environment, and the more non-tariff barriers that advanced countries put up, the less chance they have of doing so. It is in everybody’s interests to pursue a global free trade policy. This country has always shown the way on that, and this Government will continue to show the way.

[Dr David Drew (Stroud) (Lab/Co-op)]

rose—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Last but certainly not least, Dr David Drew.

[Dr Drew]

With regard to what the Secretary of State just said, will he do all he can to intercede with not just the US but the EU to make sure that agricultural products do not become part of a wider trade war? It is essential for the reasons he gave that less developed countries have continued access to all those markets.

[Dr Fox]

We can end on a note of perfect harmonisation, because there is no doubt that the more we can dismantle of the common external tariff that the EU currently has to the benefit of developing countries, the better. At last we have found a note of consensus.

[Mr Deputy Speaker]

The Financial Guidance and Claims Bill will not be taken today, so we will deal with the next statement, and the rest of business will be completed. After the next statement, we will take points of order.