The company, which operates the vast Port Talbot site in south Wales, fears it may fall foul of stringent US origin rules that threaten its $100 million annual export business to America.
Speaking on Wednesday, Starmer confirmed that the agreement – brokered with US President Donald Trump last month to lift tariffs on UK steel and aluminium – could be enacted “in just a couple of weeks”. The deal pauses the imposition of new 50% tariffs on British metals and keeps the current rate at 25% until at least 9 July. However, key implementation details, including quota sizes and qualifying conditions, have yet to be finalised.
At the heart of the issue is the “melted and poured” rule that governs US steel imports, which mandates that steel must be manufactured entirely in the country of origin to qualify for tariff exemptions. Tata Steel, in the midst of transitioning to greener production using electric arc furnaces, has been importing steel from its sister companies in India and Europe to fulfil orders – a practice that could breach the US requirements.
The Times has reported that UK negotiators are pressing for a carve-out that would allow Tata’s steel to qualify under the new trade terms. A senior government source told the paper they were “confident” that a solution could be found, but acknowledged that “the negotiations are complex.”
Tata Steel shut down its traditional blast furnaces at Port Talbot last year as part of its £1.25 billion plan to decarbonise production. While this move aligns with the UK’s green industrial strategy, it has introduced complications for exports to markets such as the US that enforce rigid origin definitions.
The US has also raised concerns over British Steel, currently owned by Chinese conglomerate Jingye Group. American officials reportedly worry that Chinese state-linked ownership could create a “back door” for Chinese steel to enter the US market under a British flag. In response, the UK government invoked emergency powers in April to temporarily take control of British Steel’s Scunthorpe plant, citing national security concerns.
The urgency surrounding the agreement has intensified amid a global escalation in trade protections. Earlier this week, the US formally increased steel and aluminium tariffs to 50% for most international partners, placing significant pressure on UK exporters.
Industry leaders have urged both governments to fast-track the trade agreement. Russell Codling, a director at Tata Steel, told MPs that ongoing delays have disrupted approximately £150 million in transatlantic business. “If we can get this deal enacted as quickly as possible … it will get stability for us and for our customers in the US,” he said.
While the UK government is framing the US-UK Economic Prosperity Deal as a flagship post-Brexit win, the uncertainty over Tata’s eligibility underscores the complex realities of global trade policy – particularly when it intersects with industrial strategy, environmental goals, and national security sensitivities.
Jamie Young
Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the 'covid era' and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine's coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk
