Lord Hunt of Wirral (Con)
My Lords, can the Minister confirm what conversations Ministers have had with their counterparts in the US about steel tariffs? How many times have Ministers spoken with US trade representatives since last Sunday, for instance? In particular, can she confirm that the first 500,000 tonnes of steel to the US will be tariff-free as they were under President Trump’s previous Administration? And finally, can she bring us up to date on the Government’s efforts to obtain a free trade agreement with the United States?
The Minister of State, Department for Business and Trade and Treasury (Baroness Gustafsson) (Lab)
I thank the noble Lord for his question. I think we all agree that the US is an indispensable ally in many areas. As he may have seen, President Trump has said he has had a couple of good, constructive calls with Keir Starmer and the two enjoy a good relationship. The Prime Minister has said that he would like to work with the US to develop a trade deal, and we are keen to work with the Trump Administration to capitalise on opportunities and deepen and strengthen our relationship.
With regard to the specifics around what will happen within the steel sector, there is a lot of hypothesis and noise at the moment, but there are currently no established facts about what that will look like. The Government will make any key decisions in light of those key facts as and when they emerge, and we will not be drawn into a hypothetical conversation.
With regard to a free trade agreement, we have talked about the fact that the US is such a valuable ally, and we would love to be able to deepen those trading relationships. That said, 18% of our trade today already happens with the US. Any free trade agreement set in place would need to best represent UK interests.
Baroness Kramer (LD)
My Lords, being emollient has never worked with President Trump. Will the Government heed my leader Ed Davey’s calls to work with like-minded allies, including Canada and the EU, to respond to both steel tariffs and potential dumping, including plans for retaliatory tariffs on targeted American exports such as Tesla vehicles? Have Ministers convened a meeting with the leaders of our four UK nations to work together to protect our steel industry? The Canadians have called all their Premiers together. Are the Government working not just with our steel companies but with the unions to protect steel jobs? This country would never start a trade war, but it cannot weakly acquiesce in being the victim of one.
Baroness Gustafsson (Lab)
I thank the noble Baroness for her question. I agree that the UK steel industry is something that we hugely value and look to support in any way that we are able. To that end, we have a steel strategy being published this spring which will outline how we intend to make the industry as sustainable as possible. A steel council is already in existence, and I can confirm that it includes representatives from the union. The Secretary of State for the Department for Business and Trade is in a regular and open dialogue with the industry, and we will consider all the tools in our toolkit to make sure that we are able to support the industry. I note as well that £2.5 billion of investment has been set aside to support the UK steel industry.
Lord Dodds of Duncairn (DUP)
What assessment has the Minister made about the impact on Northern Ireland of EU tariffs in retaliation, given that we in Northern Ireland under the Windsor Framework would be subject to the EU regime in that regard? Has the Minister spoken with the Northern Ireland Executive about the damage that would be done as a result for Northern Ireland?
Baroness Gustafsson (Lab)
I thank the noble Lord for the question. Again, it is very difficult to comment on the specifics of what the tariffs will look like when we are at a point when there are few facts and a lot more conversation and speculation. Northern Ireland is a part of the United Kingdom customs territory and internal market. For goods moving into Northern Ireland that do not subsequently enter the EU, the duty reimbursement scheme enables traders to reclaim or remit applicable EU duties in full. However, the implications for Northern Ireland of the substance of any arrangements will be a key aspect of the considerations and the ongoing consultation with our partners, both within the UK and within the steel sector at large.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, on Tuesday in the other place, the Minister’s colleague, the Minister for Trade Policy and Economic Security, said that
“a clear-headed sense of the … national interest”.—[Official Report, Commons, 11/2/25; col. 182.]
was required in reset talks with the EU. Given that that is the case, and following on from the question from the noble Lord, Lord Dodds, can she tell us what His Majesty’s Government are doing proactively with the EU to deal with the complexities and constraints of the Windsor Framework if tariffs come to the EU—I accept her point about hypotheticals—so that it does not impact on Northern Ireland?
Baroness Gustafsson (Lab)
Forgive me. I cannot comment further on the specifics of the Windsor arrangement in absence of the facts, but on the relationship with the EU, this Government were elected with a strong mandate to reset that and make sure that we build on the relationship we have, both with Europe and the US—I do not think this is necessarily a binary choice between the two. I suspect that when we think about the strategy particular to the steel industry, understanding what those relationships look like with the EU but also with the US, and the specifics of any tariff arrangements in place, will be a key factor of those considerations and the strategy at large. We will not be afraid to make sure that we are representing UK industries in supporting the steel industry to the best of our ability.
Lord Howell of Guildford (Con)
My Lords, the steel industry is paying much the highest electricity costs in the world, and unless we can get around that problem, we are not going to be selling steel anywhere. The Minister did not mention that. Could she say what is being done to address that part of the problem, which would not solve all the difficulties but would certainly make things less difficult than they are now?
Baroness Gustafsson (Lab)
I acknowledge that electricity and power costs within the UK are higher. In my role, as I think about investment, that is something that we need to make sure we understand and grapple with as we support stronger investment in the UK overall. With regard to the steel industry specifically, there are initiatives and schemes for high-intensity energy consumers within the UK that are valuable assets, such as the steel industry, to support them with those energy costs. However, while I acknowledge that that support is specific to the steel industry, wider UK industry as a whole really needs to understand what we can do to grapple with energy costs. On that, significant investment is under way to increase the supply of energy within the UK and the transition into cleaner energy environments. A lot of work and investment have gone into that as part of the green energy transition.
Lord West of Spithead (Lab)
My Lords, the steel industry is a strategic asset for the country. The Minister stressed the importance of our link with America, but it is important that the Americans understand that if they are saying that Europe is going to be responsible for its own defence without much American support then the strategic and sovereign capabilities in a number of areas such as steel become even more important. That message needs to be put across.
Baroness Gustafsson (Lab)
I wholeheartedly agree with my noble friend that the steel industry is a vital asset within the UK. As I think about emerging markets and emerging technologies—for example, the electrification of cars, or building infrastructure to support AI investment around data centres—steel is always going to be an essential component of building up our own expertise, not just within the industry itself but within those other emerging industries. That is why building on our sector expertise and working with that market is going to be key to delivering on the Government’s ambitions on growth. I come back to the point that having a steel strategy—which will be coming out in spring—working with the industry through the steel council and having regular and open dialogue are all essential, and indicative of the value that we place on the industry.