Trump threatens UK's steel industry with punitive tariffs

The UK's embattled steel industry is going to get hit twice through the planned imposition of swinging 25 per cent import tariffs by the US.

There will be the damage caused to the industry's sales to America - the UK sends £360m worth of high value steel product across the Atlantic. That's 15 per cent of the industry's total exports that will be made uncompetitive.

The domestic market, and other export markets, will also likely take a hit through the fall out from competing countries diverting their produce.

“We are one of its (the US’s) oldest and closest allies,” lamented UK Steel in response to the news. “We trust the UK Government will push for and fully support a robust response from the EU.”

As to the first point, an old ally of the US the UK may be but the ‘special relationship’ is a myth and basing an appeal to Mr Trump’s better nature on it isn't going to get the UK very far.

These tariffs - there is also a 10 per cent one on aluminium - have been in the works for some time and as investment bank UBS pointed out in a research note they “do not seem to provide room for country carve outs”. Even Canada looks set to get clobbered.

UK Steel’s hope that the EU will get punchy is, however, likely to be realised.

The EU and the UK might continue to snipe at each other but on this their interests are basically in lockstep, as they more or less were in the case of the huge tariffs the Trump administration tried to impose on Bomardier’s C-series aircraft, for which parts are made in Northern Ireland.

That one ultimately produced a surprise legal victory in January when a case brought against them got to the US International Trade Commission. It voted unanimously against American plane maker Boeing.

The steel issue is a very different one and could represent the first salvo in a global trade war in which the EU looks like it will retaliate without the need for any urgings from the UK. “

European Commission president Jean-Claude Juncker said the bloc will “react firmly and commensurately” and develop a plan to hit back on the basis of World Trade Organisation rules “in the next few days.”

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” he declared.

Hiding behind him, the UK meanwhile urged countries to work together to solve “problems of over capacity” that have bedevilled the steel market for some time. Let’s all hold hands. Group hug!

No one seems inclined to do that. They’re more interested in throwing bricks. The prospect of a trade war in which no one will win is now real and the markets fell out of bed in response.

It couldn't have come at a worse time for a UK beset by Brexit related uncertainty and coughing and spluttering in the economic slow lane.

This sort of event only serves to underline (again) why it's better to be part of a club: It means you can throw bigger bricks and are better able to secure a settlement in your interests.

A Britain led by ugly nationalists may have to suffer the consequences of being on the outside looking in for that lesson to be learned.