Liam Fox brands Trump's steel tariffs plan 'absurd' amid fears of global trade war

Liam Fox has said it would be “absurd” for the UK to be hit by punishing trade tariffs on steel imports to the US, and vowed to seek an exemption from Donald Trump on a visit to Washington next week.

The International Trade Secretary said Mr Trump’s plan to impose sweeping tariffs on metal imports was the “wrong way” to deal with the problem of cheap overseas steel, as the move prompted fears of a transatlantic trade war.

The President announced on Thursday that he had signed an executive order to slap tariffs on steel and aluminium imports, as part of efforts to protect American jobs and national security – but he hinted that exemptions would be possible for allies such as Canada and Mexico.

However, the trade body UK Steel warned the tariffs could have a “profound and detrimental impact” on the industry, while union leaders demanded action to protect British jobs and avoid a “global trade war”.

Dr Fox, who will fly to Washington for talks next week, said the UK produces “very high value steel, some of which can’t be sourced in the United States and will simply push up the price of steel there”.

He told BBC Question Time: “We also make steel for the American military programme, so it’s doubly absurd that we should then be caught on an investigation on national security.

“So our view is yes, we can deal multilaterally with the overproduction of steel, but this is the wrong way to go about it. Protectionism, tariffs, never really work.”

Asked if Britain could be exempt, he said: “We will have to wait to see what the announcements are; we will have to wait to see if there is a time for negotiation.

“That’s why I am going to Washington next week.”

Surrounded by workers in the White House, Mr Trump confirmed the 25 per cent levy on steel imports and a 10 per cent tariff on aluminium in response to an “assault on our country” from cheap overseas metal.

He said the US will remain “open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security”.

UK Steel’s director Gareth Stace said the tariffs “would have a profound and detrimental impact on the UK steel sector, which exported some 350,000 tonnes of products to the US in 2017, over 7 per cent of its total exports”.

“The UK sector is in the midst of a fragile recovery following years of considerable turmoil, it would be utterly devastating if this were to be undermined,” he added.

But the industry also fears the indirect consequences of Mr Trump’s actions, which could lead to cheap Chinese steel being dumped on European markets instead of sold to the US.

Roy Rickhuss, general secretary of steelworkers’ union Community, said: “Donald Trump’s short-sighted strategy will put jobs at risk on both sides of the Atlantic.

“It is now more important than ever that Theresa May and Liam Fox use every bit of influence they have left in America to protect the jobs of British steelworkers.

“The steel crisis cost our industry thousands of jobs, and the last thing we need now is a global trade war.”

Downing Street dodged questions about whether the UK could be offered an exemption to the US tariffs as an EU member, or during the planned Brexit transition period due to last until the end of 2020 – or whether an offer would be accepted.

A spokesperson promised to “robustly” defend the UK steel industry, saying: “Tariffs are not the right way to address the global problem of overcapacity. That requires a multilateral solution.

“Liam Fox is travelling to the US next week to get more detail. The important part of this process is to get that detail and then consider the next steps.”

But when pressed on whether EU rules could block the UK from benefiting from a bilateral exemption until after any Brexit transition, the spokesman said only: “We want to work with our partners to consider the scope for exemptions. Obviously, we remain a full member of the EU, and that’s why we’re going to work with our EU partners.”

Labour MP Stephen Kinnock, whose South Wales constituency includes Port Talbot steelworks, said Ms May had “let down” British workers by failing to stand up to the US President.

And Shadow Trade Secretary Barry Gardiner wrote Dr Fox, saying: “For an entire week you have failed to come to the House of Commons to tell Parliament what representations you have made to the United States of the European Union to protect UK steel producers. Why?

“Do you not care that 32,000 skilled men and women who work in our steel sector are fearful for their jobs and their families’ future? They are waiting to hear some words of support from this Government for their industry.

“When will you do the decent thing and come to the House to made a statement?”

The EU’s trade commissioner, Cecilia Malmstrom, said the bloc should be excluded from the measures and she would meet US trade representative Robert Lighthizer to discuss the situation on Saturday.