United States Tariffs: Steel and Aluminium

Lord Stevenson of Balmacara Excerpts

Tuesday 13th March 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble Baroness, Lady Fairhead, for repeating the Statement. This is my first opportunity to debate her at the Front Bench, and I am looking forward to working with her on the international trade Bill when it reaches your Lordships’ House.

We have, over the past year, heard regular statements about problems affecting our steel industry, although this announcement of tariffs on steel and aluminium imports, blatantly aimed at protecting US producers, must rank as one of the worst because of its implications more widely for free trade.

The House of Commons Library briefing paper on the steel industry in the United Kingdom 2016 suggested that the steel sector accounted for £1.6 billion of UK economic output, which is about 0.1% of the UK economy and 0.7% of our manufacturing activity. It has about 600 businesses, and 32,000 people are employed in the sector. The UK is the 18th-largest steel producer in the world, the fifth-largest in the EU after Germany, Italy, France and Spain. Approximately 15% of 350,000 tonnes of steel was exported directly to the United States in 2017.

We should extend our concern and support to the employees of British steel firms and their communities, which must be very worried about this questionable and ill judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the economic hit that will be felt, particularly in communities outside London?

I have three further questions for the Minister. First, this announcement was not unexpected. It followed a series of pledges from President Trump to take what he calls “tough and decisive action” on perceived threats to the US national interest and to domestic producers as a result of international trade competition from overseas. It is very much in line with his “America first” platform. When did the Government become aware that President Trump was going to impose tariffs on imported steel and aluminium? What representations did the Government make to the White House prior to the announcement, and what assurances were sought that these tariffs would not be applied to UK exports?

Secondly, earlier this year, President Trump announced tariffs on imported washing machines and solar panels to give a boost to US producers in these sectors. President Trump also imposed a 30% tariff on imported solar cells, and last year the Department of Commerce sought to impose tariffs of up to 292% on imported narrow-body, medium-range jets until the US International Trade Commission accepted the arguments made by Bombardier and others and overturned that decision. What other sectors of the economy are the Government concerned about? What representations are they currently making to ensure that the UK will be able to export to the United States in the near term without facing unfair tariffs? For example, the President has mentioned additional protection for intellectual property. Given the strength of our creative industries, have the Government taken up that issue in particular?

Finally, the Secretary of State announced the establishment of a US-UK Trade and Investment Working Group in July last year, a group that has met twice since then. Given that the President has said he would welcome a trade war and thinks America would win it, what discussions have been had about steel, aluminium and the other new tariffs at these meetings? What assurances have been sought from the US Government about exemptions for UK exports in any free trade agreement that might be in consideration post Brexit?

[Lord Purvis of Tweed (LD)]

My Lords, we too are grateful to the Minister for repeating the Statement. Just at the time that we are loosening our ties with our largest single integrated market in the European Union, we see the next bilateral largest market in the United States moving towards a protectionist tone. Over recent months we have been repeatedly counselled by Ministers that we should look at not just the rhetoric of the United States President but at the actions. Now it is quite clear that there are repeated actions which are contrary to the interests of the British economy. The announcement of the Secretary of State today and of economic advisers last week are clear.

When I was in Buenos Aires as an observer at the ministerial conference of the WTO, the US left without a communiqué being signed. These worrying trends are clear to see. Last year, the Secretary of State, Dr Fox, said, while in the US, referring to the UK/US relationship:

“Firstly, we must lead by example, and work to encourage our trading partners across the world to support, and adhere to, the rules-based global trading system”.


Will the Minister therefore confirm that it is the view of Her Majesty’s Government that this action by the President is clearly contrary not only to how strong allies with a so-called special relationship should act but to international law?

We also know that in the presidential proclamation the President said that there would be a mechanism for reviewing the decision on impairing US national security if the countries concerned showed that their actions would not impair that national security. However, in recent discussions with the US, the EU and Japan could not discern on what basis these issues would be considered. What is Her Majesty’s Government’s view on these blackmail conditions that President Trump would seek to impose on allies for there to be adjustments to, or the removal of, these tariffs?

We have heard reference to the working group, which I have raised in this Chamber before. Did officials on the working group inform us that there was a likelihood of these tariffs being imposed on the United Kingdom? The Secretary of State indicated that he was due to visit the US and had no doubt planned to discuss the progress of the working group. What status does the working group now have given that we are clearly in a trade dispute?

Finally, we and our allies around the world continue to believe in free trade, even if the United States does not. How will we seek redress within the WTO mechanisms? Will the Minister reassure the House that we will be in precisely the same position as the European Union if we appeal for redress under the WTO mechanisms? This trend of protectionism cannot be in the interests of the United Kingdom. Clearly, our interests lie in standing shoulder to shoulder with our European Union allies on this issue.