The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
With permission, Mr Speaker, I will make a statement on the United States’s imposition of steel and aluminium import tariffs.
On Thursday 31 May, President Trump announced that the United States would impose tariffs of 25% on steel imports and a 10% tariff on aluminium imports from the European Union. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, will be subject to the same tariffs. Although Argentina, Brazil and South Korea have avoided tariffs, those countries agreed to lower exports to the US. The indications are that US imports from those countries will be restricted, in some instances involving quarterly quotas.
For products within the scope of these tariffs, in 2017 the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. Put another way, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports by tonnage, at a value of £360 million and £29 million respectively.
We are deeply disappointed that the United States has taken this unjustified decision, particularly on grounds of national security. We share 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 US is vital to international peace and security, and other EU states are also key players in transatlantic security co-operation.
As I said the previous time I addressed the House on this issue, these unilateral trade measures have weak foundations indeed in international law, and they are not consistent with the US Department of Defence’s own judgment in an investigation that was conducted on the basis of national security. We believe that the EU should have been permanently and fully exempted from the unjustified measures on steel and aluminium. We will continue to make this case at the highest level, in concert with the EU. Our priorities now are to defend the rules-based international trading system, which supports growth, consumers and industry; to ensure that this does not escalate and risk further undermining world trade; and, most importantly, to protect the interests of British industry.
The use of national defence as the rationale for this action threatens to create a worrying global precedent. We are clear that these unjustified additional tariffs could harm consumers, hold back growth and, ultimately, damage industry by driving up the price of inputs and production, and diminish global competitiveness. We remain of the view that issues of global overcapacity in the steel market are best solved through international collaboration, 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, and the UK will continue to work within the rules-based international trade system to tackle this problem through the G20 steel forum.
However, as the US has decided to impose these tariffs, which will damage the steel and aluminium industries in Europe, we must respond. As a member of the European Union, we will continue to work with the European Commission and member states on the EU response. That is focused on three areas. First, the European Commission is preparing to introduce immediate duties on the US, ahead of a World Trade Organisation dispute. Following a unanimous decision by member states, the EU notified the WTO of a potential list of product lines on 18 May and could trigger tariffs on this list from 20 June. The Commission is required to seek member state approval a second time in order for any of the countermeasures to come into effect. Specific timings are yet to be determined by the Commission.
Secondly, the EU can apply safeguard measures to protect the steel and aluminium industries from being damaged by an influx of imports to the EU caused by the displacing effect of US tariffs. The EU is finalising an ongoing investigation launched on 26 March into potential EU-level safeguard measures to protect its own steel market from trade diversion resulting from US measures. Provisional measures could be adopted as early as mid-July. The EU has also introduced surveillance of aluminium imports to determine whether an aluminium safeguard investigation is justified. We will support any safeguard measures required to deal with steel diversion as a result of these tariffs.
Thirdly, the EU can pursue a dispute at the WTO, and it filed such a dispute, challenging US steel and aluminium tariffs, last Friday. It is right to seek to defend our domestic industries from both the direct and indirect impacts of these US tariffs. The response must be measured and proportionate, and it is important that the United Kingdom and the EU work within the boundaries of the rules-based international trading system. Since the President asked the Department of Commerce to launch the investigations into the national security impact of steel and aluminium imports last April, the Government have made clear on repeated occasions to the Administration the potentially damaging impact of tariffs on the UK and EU steel and aluminium industries. The Prime Minister has also raised her concerns with President Trump. I have spoken on multiple occasions to the Commerce Secretary and US trade representative about the investigation, to the director general of the WTO, Roberto Azevêdo, to the EU Trade Commissioner, Cecilia Malmström, as well as to my colleagues in member states. The Government have worked closely with the EU as part of our unified response. In addition, I assure the House that we have been in regular contact with the UK’s steel and aluminium industries throughout, and the Secretary of State for Business, Energy and Industrial Strategy has convened a steel council, which will take place shortly. I have been in touch with UK Steel throughout, most recently at a meeting in Westminster earlier today.
We remain committed to robustly defending and protecting the UK’s steel and aluminium industries and their employees. The Government will continue to press the US for an EU-wide exemption from these unjustified tariffs. In parallel, UK suppliers will want to encourage their US customers to seek product exemptions via the process that is being overseen by the US Department of Commerce. Tomorrow morning, the Department for Business, Energy and Industrial Strategy will host a meeting with the industry to share information and advice on the product-exemptions process.
UK firms without a presence in the US cannot apply directly for a product exemption, which means that UK firms will need to work with their products’ end users in the US to apply for a product exemption and to gather the relevant data and justification for such an exemption. The Government will support applications made on the behalf of UK industry with representations to the Department of Commerce to process applications for product exemptions as promptly as possible. My Department published an information note on the procedure on gov.uk on Friday.
The Government are committed to free and fair trade, and to the international rules that underpin both. We will seek to promote and protect those rules alongside the interests of British industry. I commend this statement to the House.
Barry Gardiner (Brent North) (Lab)
I am grateful to the Secretary of State for advance sight of his statement and for his telephone call yesterday afternoon. He is a very courteous man, but no amount of courtesy can hide the fact that he and his party have a record of failure when it comes to defending our steel industry.
When China began dumping its over-production into the European market back in 2015, it was the Secretary of State’s Government who opposed the European Union taking stronger defence measures and who precipitated a crisis for producers in the UK that led to the loss of companies such as SSI and of 1,700 jobs at Redcar. That was not some civil service mistake, but ministerial ideology. That ideology has been confirmed by the Government’s refusal to accept the amendments that Labour tabled to both the customs Bill and the Trade Bill precisely to strengthen the trade defence measures that we could take against such illegal action.
Last week, the Secretary of State’s initial response was to say that he did “not rule out” countervailing measures with our European partners. Did “not rule out” such measures? He should have been demanding them. On the departmental website it says begrudgingly that while we are members of the EU we
“must abide by EU trade decisions”.
That hardly sounds like a full-throated and co-ordinated position with our EU trade partners—and no wonder: when the EU recently voted to modernise the trade defence measures available to protect our industries, our Government were one of only two to vote against them. It is no use the Secretary of State saying that the Opposition voted against the Trade Bill and the customs Bill and that that would have left us with no Trade Remedies Authority. We voted against those Bills precisely because they were so weak and ineffective on this matter, and he knows it.
Some 34,000 UK jobs in our steel industry and 3,500 more in the aluminium industry are at risk because President Trump is imposing protectionist tariffs that the rest of the world believes are illegal under WTO rules. We saw him use the same protectionist policies to attack Bombardier in Northern Ireland. This time, he has based the policy on a fundamental lie. He is pretending that the tariffs fall under section 232 of the Trade Expansion Act 1962 and are necessary for the national security of the United States. They are not. The lie is to try to avoid the perfectly correct response that the EU is now making in taking this as a dispute to the WTO, because the WTO is naturally reluctant to rule on what is and what is not member states’ national security.
All our steel producers want is a fair and level playing field on which to compete. They and we acknowledge that there is a real issue of global overcapacity, which brought our industry to crisis point three years ago and threatens to do so again now. That is why there are three issues on which we need absolute clarity from the Secretary of State. First, will the UK give the consent required to trigger the countervailing measures and enable them to come into effect on 20 June? The implication of the statement is that the Secretary of State will, but I ask him to leave no doubt. Secondly, the greatest threat to jobs is perhaps not directly from the loss of trade into the USA as a result of tariffs—the USA only accounts for 7% of our steel and 3% of our aluminium exports. The real danger is from the products diverted from other countries which can no longer export into the US being dumped here. When I first read the statement, I believed that the Secretary of State had made a commitment to agree to strong safeguarding measures to protect against such an influx surge. On careful reading, however, it appears that he may have given himself a get-out clause. He talks of supporting
“any safeguard measures required to deal with steel diversion”.
Can he confirm that he will support maximal measures to defend the immediate interests of our steel industry as well as any future trade defence measures that go beyond the lesser duty rule?
Thirdly, the Secretary of State mentioned that the EU filed a dispute at the World Trade Organisation on Friday. Strangely, he did not say that he welcomed that move. He knows that President Trump wishes to undermine the WTO and would prefer to do his trade deals on a bilateral basis using America’s economic might to obtain concessions. Can he confirm that, once outside of the EU, it would be his intention for the UK to continue with a WTO dispute against the US and that he is not minded to succumb to bully-boy tactics for fear of offending the President before a future trade agreement?
We do not want a trade war; most rational people believe that there are no winners in such a war. Only President Trump has said that he believes that he can win one. The UK and the EU must stand up to this behaviour and restore the integrity of the rules-based system. I therefore welcome the upcoming G7 summit and the opportunity that it provides the Prime Minister to press the case with President Trump. Will the Secretary of State assure the House that, however diplomatically embarrassing it may be for Canada as the host country, the UK will insist that this matter be given a high priority on the formal agenda and not relegated to the sidelines? The Prime Minister must persuade other leaders to respond to the fundamental problem of global oversupply as well as the unjustified action of the United States. The 37,500 workers in the UK whose jobs depend on these industries will expect her not to fail them.
Dr Fox
I am grateful to the hon. Gentleman. He is right that there is an issue of global overcapacity and that, as I have said, that must be tackled on a multilateral basis because it cannot be effectively tackled on a bilateral basis with the use of tariffs. That will not be a successful way of dealing with it. What it has resulted in is a great deal of energy being spent on blue on blue activity, rather than on dealing with the issue at source. However, he is wrong about the support to the steel industry. As of 8 November 2017, the Government have, for example, paid more than £207 million in compensation to the steel sector as an energy-intensive manufacturer.
The hon. Gentleman is also wrong about the Opposition’s vote against the Trade Bill. They voted against not the provisions of a Trade Remedies Authority, but the setting up of a Trade Remedies Authority, which would have meant that we had no defence whatsoever. He is wrong about another matter, too. The American President was not involved in the Bombardier dispute. That was a commercial dispute brought by Boeing and nothing to do with the US Administration. However, the hon. Gentleman is right on the precedent of national security. The problem with using national security, as has been done in this case through the section 232 mechanism, is twofold: first, if the United States were successful, it would set a precedent for others to do the same and to use national security as a pretext for protectionism; and, secondly, it leads the WTO into the realms of having to determine what is, and what is not, acceptable as a definition of national security. That is something that the WTO has always shied away from.
When it comes to the countermeasures, we will still want to see what the measures themselves are. Specifically, we have been talking to the Irish Government about the issue of bourbon being on the list because of the potential implications for the Scotch whisky industry and the Irish whiskey industry. We will want to continue those discussions with the Commission.
I made it very clear that we will have whatever safeguards are required. I do welcome the WTO dispute. If we are talking about the need for an international rules-based system, it is the appropriate mechanism for us to show our displeasure and that is the correct route for us to go down. Once we have left the European Union, I hope that we will have no problems with a UK exemption.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Will the President of the Board of Trade confirm that we are obliged not to seek an exemption for ourselves because of the duty of sincere co-operation, and that we can therefore can only do things with the EU? Does he share my concern that tit-for-tat retaliation is not in our interests and may make a trade war worse? The lesson of trade history is that protectionism is worst for the country that imposes it, and going tit for tat is therefore not in the national interest.
Dr Fox
My hon. Friend, as usual, raises interesting points. He is completely correct that a tit-for-tat dispute will help nobody. The United States has already seen an increase in the domestic price for steel. That means that input prices in the US are likely to rise, its output prices will ultimately rise and it will become less competitive, which is not an answer to its current trade predicament. When it comes to the position of the United Kingdom, had we been given an exemption by the US, we would still have been required to carry forward any counter- measures proposed and implemented by the European Union, but if we had implemented countermeasures without any measures actually having been applied to the United Kingdom, we would have been in breach of WTO law. It is a Catch-22.
Stephen Gethins (North East Fife) (SNP)
In spite of what the International Trade Secretary says, so much for the special relationship and the special treatment that the Government were seeking from President Trump. Coming hard on the heels of the weekend’s report that the Government are preparing for a Brexit armageddon, the chickens are truly coming home to roost for Brexiteers, who have had years to prepare for their big moment. But this has an impact on all of us, and the Scottish Government were left to secure steelworks in Lanarkshire. Will the Secretary of State tell us what discussions he has had with the Scottish Government and the industry in Scotland? His statement shows just how important the European Union is in these matters. Does it not make more sense to remain close to those who are closest to us economically and politically in Europe, and stay part of the customs union?
Dr Fox
The answer to the hon. Gentleman’s last question is no. The Minister for Trade Policy has been in touch with the Scottish Government in the past few days to discuss the wider impacts on the industry. I have made it very clear that we regard this as a UK-wide issue. The UK Government will take whatever measures are required, including safeguarding, to protect the whole UK steel industry.
Mr Philip Dunne (Ludlow) (Con)
First, I applaud the Secretary of State for focusing in his statement on how unfortunate it is that the United States has used national security as its excuse for this tariff measure. It is particularly ironic given a number of US-UK treaties under which specialist steel products are made available to the United States specifically to assist in its national security. May I encourage him to look at securing a product exemption for those products as soon as possible?
Secondly, as the Secretary of State and his colleagues are aware, Bridgnorth Aluminium in my constituency is one of the largest aluminium manufacturers in this country; 20% of its exports go to the United States, as it provides a product that is not manufactured there. The United States is hurting itself with this measure. The company not only fears that the increase in price due to the tariffs on that product will have an impact on demand, but is particularly concerned about the displacement factor from incoming Chinese imports.
Dr Fox
My hon. Friend, who knows a great deal about this subject from his time as a Defence Minister, is absolutely right. We will be looking at the displacement issue very closely to see whether safeguards are required for aluminium as well as steel. He is right about Bridgnorth in his constituency, which exported £21 million of products to the US in 2017. The irony is that the only potential competitor in that particular market is Alcoa in Warrick, Indiana, which has shown little, if any, interest in it. This situation can only lead to damage to US customers at the other end.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
As Chair of the International Trade Committee, may I take this opportunity to thank the Secretary of State for his courteous phone call to me at the end of last week outlining the situation that he found himself him? These tariffs stem from the very weird belief of the US President that if the US has a deficit with anyone, it is a result of unfair trading. Given that just about any two sets of nations find themselves in surplus or deficit with each other at times, there would be global trade chaos if the rest of the world were to follow his example of what the Secretary of State calls unjustified decision making. Meanwhile, how confident is the Secretary of State that the UK can legally take safeguarding trade defence measures if it finds itself out of the EU in March 2019, and that a trade remedies authority will be in place? My Committee has concerns about that, as I am sure he knows.
Dr Fox
I am very grateful to the hon. Gentleman for his comments. He is right that we have to have the TRA up and running. As he knows, we have now advertised for the most senior appointments and agreed its setting in Reading.
On the wider economic issue, the hon. Gentleman is absolutely correct. It is impossible, in an open and free trading system, that all economies will be in balance with one another. Surpluses and deficits are part of the allocation of resources that happens inside a free market. Were we all to aim for a trade policy where everybody was in balance, it would not be a free trading system. Apart from anything else, consumers would soon feel the detrimental effects of such a system.
John Howell (Henley) (Con)
Picking up on that point, will not a system of retaliatory tariffs hurt consumers more than anything else, and will it not be ordinary workers who suffer? Is the Secretary of State as concerned about that as I am?
Dr Fox
As my hon. Friend knows from being a trade envoy to Nigeria, it will not just be those in developed countries who feel the effects if this has a slowdown impact on the global economy. If we have tariffs, countermeasures and then measures against the countermeasures, it is very easy to see how the situation could ramp up into a global trading disaster. We need to try, in the time ahead, to get the United States Government to change their mind—to listen to the voices coming from American business and the American Congress about the damage that may ultimately be caused inside the American domestic economy.
Caroline Flint (Don Valley) (Lab)
I would be really interested to know what arguments the Secretary of State thinks are going to work with the Americans. Last time there was a trade war like this, some 200,000 jobs were lost in the United States. What efforts is he already making to identify and analyse the impact on the US economy? It seems to me that that is the biggest argument we can use.
Dr Fox
The right hon. Lady is absolutely correct that if we are to get a change in US Government policy, the most effective pressure will come from US business and the US Congress. I was very heartened to hear Chairman Brady of the Committee on Ways and Means making exactly these points yesterday—if American input prices rise, output prices will rise, and that is likely to hinder, not help, the problem with the American trade deficit. I hope that our colleagues in Congress will listen to the views being expressed clearly on both sides of the House and make those points accordingly.
Richard Graham (Gloucester) (Con)
When there was a sharp exchange on trade between China and the US recently, it was resolved surprisingly quickly. Does my right hon. Friend see that there are possibilities for a similarly swift resolution to this? If there are not, how confident is he that our voice in the EU will be able to prevent the EU from taking strong retaliatory measures and getting into the spiral of trade wars that he has described?
Dr Fox
The EU’s measures are designed to be proportionate and legal so that we can make the case that we have responded to what we believe to be legally dubious moves in a properly legal way, through the rules-based system. That is the appropriate way to go. I do not believe that the EU tariffs are escalatory, and it would be hugely unfortunate if further moves in that direction were made by either the United States or Europe.
Anna Turley (Redcar) (Lab/Co-op)
In 2002, similar retaliatory action was organised by the EU and had quite a profound effect on getting the US to drop the tariffs. Does the Secretary of State therefore wholeheartedly support the action that the EU is taking, and also the route through the World Trade Organisation?
Dr Fox
The potential countermeasures that the European Commission is setting out fall into two groups in their timing, and it is entirely possible that all or a smaller number of those measures could be put in place. I hope that the flexibility that is being shown in both the timing and the scope of their application lets the United States understand that the European Union is keen to have an agreement. It is keen not to rush into countermeasures, but to give the American Administration time to have second thoughts, which I think would be beneficial to all.
Mr Peter Bone (Wellingborough) (Con)
I think everyone will welcome the fact that the Secretary of State has come to the House at the earliest opportunity to make a statement. The European Union is justifiably outraged by the imposition of tariffs, but if we were to leave the European Union without a deal, why on earth would the EU want to impose tariffs on us?
Dr Fox
I know that opinions on Brexit are very strong, but with all due respect, we cannot see every global economic issue through the prism of Brexit. This action has been taken against what we believe to be WTO rules. It affects the European Union as much as it affects Canada and Mexico, which have economies of a very different size, and it is because of unilateral action taken by the United States. It therefore requires a proportionate response by all the countries affected, through the WTO mechanism. We have to show that we, at least, show respect for that rules-based system.
John Mann (Bassetlaw) (Lab)
I cannot believe what I am hearing. It is a good job that steelworkers and steel communities have not waved the white flag when they have been called upon repeatedly to defend our shared values with the US over the past 100 years. We cannot give in to this. The only language that Trump understands is people fighting back. It is about time that this country fought back. We can do it. Trump likes golf—let us bring in some tariffs on golf course owners in Scotland immediately and stand up for our steel communities and steelworkers, instead of this rubbish about not being able to do anything about it. We should fight him.
Dr Fox
There are two interesting points to make on that tirade of nonsense. First, we do not have the legal authority in the United Kingdom on our own, because the European Union is responsible for this issue on our behalf. When we leave the European Union we will have greater freedom, but I say to the hon. Gentleman in all seriousness that escalation is not what we require. We need a proportionate response, made calmly, giving the United States time to reflect and change its mind. This is about getting the right result, not the right rhetoric.
Sir Desmond Swayne (New Forest West) (Con)
How realistic was it to have expected a concession on steel notwithstanding our having publicly announced our intent to undermine US security policy and trade policy on Iran?
Dr Fox
I do not think that those issues are remotely related. It has been clear from the presidential election campaign onwards that the President has concerns about the US steel industry and global overcapacity. We do not disagree with the analysis of the problem; we disagree with the remedy being applied.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State not worry that future generations will look back on him and the group of people who pulled us out of Europe as the real villains of the piece? Is it not a fact that the promise that we would give up the market of 600 million people in Europe but get a massive market in North America has proven to be false? Will he remember that this country deserves to be in Europe, fighting united for Europe?
Dr Fox
It was not me, nor any other Member of the House, who decided to pull Britain out of the European Union; it was the people of Britain, in a democratic referendum. I will send the hon. Gentleman a dictionary, and he can tell me which of the words “binary”, “referendum” and “democracy” he does not understand.
Jeremy Quin (Horsham) (Con)
As my right hon. Friend has flagged, the use of national security reasons by the United States is particularly problematic, as history is littered with examples of how nations use it with a very wide definition. What work can be done with the WTO to get a better definition of what national security actually encompasses?
Dr Fox
My hon. Friend raises an important point. In fact, the WTO has always shied away from this territory because of the implications it could have, even potentially for the integrity of the WTO itself. It is better that we find a better way to deal with the oversupply in the steel market and that no one tries to use the national security route as a remedy, because as I said, if the United States were to be successful in using it, what would stop other countries doing exactly the same on protectionist measures when it suited them?
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Is not the gist of the International Trade Secretary’s position that the US is behaving outrageously—with illegal, protectionist tariffs—so he is working with our EU partners to build a strong, sensible response with the collective weight of the EU, yet he also wants to rip up the customs and trade deal with the countries that agree with us in exchange for a future, potential trade deal with a country that clearly does not agree with us? When he said last year:
“I want the UK and USA together to lead the world as shining beacons of open trade”,
was that a complete and utter fantasy?
Dr Fox
The United States has long been at the forefront of leading global free trade, including in setting up the WTO itself. That is why we find it so disappointing that the current Administration should take this particular route and try this particular remedy for the problem. The right hon. Lady will notice that being a member of the European Union has no more protected us from these tariffs than Mexico or Canada.
Michelle Donelan (Chippenham) (Con)
The UK produces some very high-value steels, some of which cannot be sourced in the US. What more can we do to promote British manufacturing overseas?
Dr Fox
My hon. Friend makes a very interesting point. Not only do we send some very high-end steel to the United States, but some of it is steel that the United States itself does not manufacture. For end users in the United States, that will actually increase the price of a product they do not manufacture domestically, which cannot have anything other than adverse economic consequences. That is why it is very important, as I have said, that the voices of US industry and of those in Congress make their views very clear about the potential damage that this will pose, as Chairman Brady has said, to American families and jobs.
Tom Brake (Carshalton and Wallington) (LD)
The imposition of US tariffs is rash, probably illegal and certainly self-defeating. Is the Secretary of State still confident that the UK can get a better deal with a protectionist United States after the UK has left the EU than we could with the European Union? Does he agree with me that if the US continues to act like a rogue state, we may reach a point where it needs to be suspended from the G7?
Dr Fox
Even for a member of his party, for the right hon. Gentleman to refer to the United States as a “rogue state” gives us pause for thought. With this particular measure, we think the US has behaved in a way that has a very poor basis in law and does not have any justification in national security. However, treating the United States in the way he suggests would be quite wrong, and it does a great deal to explain why his party has such a small representation in this House.
Stephen Kerr (Stirling) (Con)
My right hon. Friend the President of the Board of Trade mentioned in his statement that the industry will gather at the Department for Business, Energy and Industrial Strategy tomorrow morning. What form of support will BEIS be offering UK companies, especially those that do not have a US presence, in order to secure exemptions for their products?
Dr Fox
My right hon. Friend the Business Secretary felt it would be of the greatest benefit to those in the industry to have them in and to have experts, including legal experts, talk them through the product exemption system. The product exemption system does not require a presidential agreement; it occurs at the level of the Department of Commerce. Knowing how the system works and being able to access it efficiently is of prime importance.
Stephen Kinnock (Aberavon) (Lab)
As has already been said, when President Bush introduced similar tariffs in 2002, it led to the loss of 200,000 American jobs through the steel supply chain. What steps is the Secretary of State specifically taking to influence Congressmen and women from the states that will be most affected this time, because that surely is the point of leverage through to the White House? Will he come to speak directly to the all-party group on steel and metal related industries to explain those steps in detail?
Dr Fox
I would be happy to do so. I was in the United States and visited a number of our congressional colleagues just two weeks ago. It is worth pointing out that there are 142,000 steel workers in the United States, but there are 6.5 million workers who depend on steel as part of their business, so either reductions in supply or increases in cost are likely to have a domestic effect. Again, I hope our colleagues in Congress will see— I urge all Members of the House with links to either party in Congress to use those links to point this out—that history repeating itself would indeed be tragic for everybody concerned.
Chris Elmore (Ogmore) (Lab)
At present, half of UK steel exports are sent to the EU. In the light of the US decision to impose tariffs, it is highly likely that the steel industry in the UK will become more reliant on the European Union. Will the Secretary of State make representations to Cabinet to agree that Britain should remain within a customs union? If he will not do so, why not? It is the best way to protect steel industry jobs, including in Port Talbot—many members of the workforce live in my constituency.
Dr Fox
No, I will not do that. I believe that a customs union gives us greater trading relationships with some at the expense of greater trading relationships with others. As the International Monetary Fund has pointed out, 95% of global growth in the next 10 to 15 years will be outside continental Europe, so to tie ourselves into a customs model with the slowest growing part of the global economy would be very unwise.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
What is the Secretary of State doing to ensure that this attack on our steel sector will not lead to retaliatory attacks on ceramics?
Dr Fox
The hon. Lady makes a useful point that reflects the one made by my hon. Friend the Member for Horsham (Jeremy Quin) about using national security as a pretext. If that were a successful exercise, there would be nothing to stop other sectors being involved or, indeed, to stop other countries doing exactly the same thing, which is why, at the risk of repeating myself, we must try to have common sense prevail before there is any escalation, which could be very damaging to economies on both sides of the Atlantic.
Nic Dakin (Scunthorpe) (Lab)
Everyone knows that you have to stand up to bullies, not roll over and have your tummy tickled. I am really pleased that the Secretary of State is making it clear that he will support the leadership of the European Union on this matter so that robust and proper action is taken, as it was in 2002, which led to the US backing down. Will he talk to his colleagues across Government so that we can use this moment to introduce a steel sector deal to show confidence in the steel industry in the UK?
Dr Fox
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), will have heard what the hon. Gentleman said. Again, I make the point that we have set out a reasonable and proportionate response. There is no point escalating rhetoric; there is no point escalating the terms of this dispute. We should use the time available before the imposition of countermeasures to go back to the United States and say, “You still have time to think again, to stop history repeating itself or to stop economic effects that can only be detrimental in the United States and beyond.”
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Following the tariffs on steel and aluminium, it is reported that the US Secretary of Commerce is now looking at the car industry, again on national security grounds. What analysis has the Department undertaken of what other sectors may fall victim to President Trump’s protectionist strategy?
Helen Goodman (Bishop Auckland) (Lab)
Will the Secretary of State stop talking as if President Trump is amenable to reasonable arguments? This is a deliberate attack on multilateral institutions and the international liberal order. It is evident from the proposal reported in the Financial Times this morning that the American Administration do not even want to appoint judges to the World Trade Organisation court, so will the Secretary of State support urgent EU retaliatory measures?
Dr Fox
I do not believe that it is an attack on the international order. That is far too hyperbolic. It is a response to an understandable concern about the over-production of global steel and the effect that that can have in the United States, including on US steelworkers, but made in an inappropriate way. We believe that the best approach is on a multilateral basis, through the G20 steel forum, but if the United States insists on applying these measures we will apply countermeasures. We believe that the rule of international law must be upheld.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Secretary of State’s words so far have not given me comfort and I am sure that the ceramics workers in my Stoke-on-Trent constituency will have similar concerns. Countermeasures and potential retaliatory countermeasures from the US would do untold damage to the ceramics industry. One way in which the Secretary of State could help domestically to fortify and strengthen the industry would be to talk to his Cabinet colleagues about bringing forward the ceramics sector deal and giving some certainty to an industry that really has had enough.
Dr Fox
There are two things that we can do. We can help to define and identify new markets for top-end UK ceramics to guarantee the prosperity and jobs in the sector. We can also make sure that we have a trade remedies authority of our own that is able to guarantee the measures that are needed. Of course, the hon. Gentleman voted against the establishment of exactly that.
Paul Blomfield (Sheffield Central) (Lab)
It is steelworkers who are on the frontline in terms of the risk from the direct and indirect impacts of the tariffs. Will the Secretary of State outline what discussions he has had with their trade unions to address their concerns?
Dr Fox
We have had discussions across the whole steel industry. However, the hon. Gentleman is not exactly right. He is correct that steelworkers will be on the frontline, but they would not be the only ones affected. The problem is that there will be knock-on effects across the whole economy. As countermeasures are applied, more sectors will become involved as a consequence of the dispute. Therefore, it is in the interests not just of the steel industry, although it clearly is at the forefront of this battle, but of all our industries and all our consumers that we bring an end to what could otherwise be a very tragic episode in global trade.