Britain’s steel and aluminium sectors are being pulled into an intensifying transatlantic trade squeeze, with new research warning that tariff escalation risks inflicting significant economic damage on both exporters and downstream industries.
An analysis by economists at Aston University finds that preferential access to the US market is worth £482mn annually to the UK economy, value now at risk as protectionist measures gather pace on both sides of the Atlantic.
The study, produced by Aston Business School’s Centre for Business Prosperity, comes at a critical juncture. The UK government is pressing ahead with its March 2026 Steel Strategy, which will introduce a 50 per cent above-quota tariff and cut safeguard quotas by 60 per cent from July. At the same time, the future of British Steel remains uncertain, adding further strain to an already fragile sector.
The findings highlight how exposed the UK has become outside the EU’s trade framework, nearly 10 years after the Brexit vote. While tariffs were intended to shield domestic producers, the evidence suggests they may instead be amplifying vulnerabilities, particularly in higher-value manufacturing sectors that rely on imported steel and aluminium.
Across the Atlantic, the reimposition of US tariffs has already had a marked effect. Imports of steel into the US have fallen by roughly 20 per cent, while aluminium imports are down by around 10 per cent. A further escalation in June, which lifted tariffs to 50 per cent, appears to have roughly doubled the initial impact.
Yet the burden is not confined to exporters. The research indicates that between 70 and 80 per cent of tariff costs are being passed on to American consumers and businesses, driving up both living expenses and industrial input costs. The broader implication is that protectionism is proving inflationary, even as it reshapes global trade flows.
For the UK, the challenge is more acute. Unlike EU member states such as Germany, Britain lacks the scale and collective bargaining power of a larger trading bloc. The report argues that this leaves it more vulnerable to trade shocks, even when applying similar levels of tariff protection.
Professor Jun Du of Aston University describes the UK as being “squeezed” between US protectionism and the EU’s defensive response. Brussels has already signalled its own escalation, proposing to double steel tariffs to 50 per cent, raising the prospect of a fully-fledged tariff spiral across key industrial markets.