Global trade partners grow impatient as US tariff relief stalls

Washington faces mounting pressure from global trade partners to deliver long-promised tariff relief. Cuts to steel, aluminum, and auto duties, announced months ago, remain unfulfilled, leaving European, Asian, and UK firms struggling under US trade restrictions.

British PM Keir Starmer at a Jaguar Land Rover plant in May, at that time, welcomed the “world-leading” agreement with US President Donald Trump. The deal would eliminate US tariffs on British steel, he said.

And yet, three months later, nothing has changed. That duty remains 25% for UK steel. UK Steel’s director of trade and economic policy, Peter Brennan, said orders from the US had “fallen off a cliff.” He claims that some firms will not outlast this crisis. On the other hand, a rival producer is even more negative and claims could be forced out of business without assistance before the end of the year.

The delay stems from US “melt and pour” rules, which only allow tariff cuts on steel produced entirely within the UK. Since Tata Steel UK shut down its blast furnaces last year, the company cannot meet this requirement until new electric arc facilities are operational in 2027. London has been pushing Washington to grant waivers, but progress on those talks has been slow.

Tim Rutter of Tata Steel said it was not due to a lack of effort from the UK government but because US departments were overwhelmed. He noted that although billions in potential opportunities for British exporters were at stake, they remained unrealized. London officials maintained that they were working to finalize the deal as quickly as possible, but industry voices warned that the ongoing delays risked deterring unilateral action.

EU and others demand swift tariff relief

The EU is stuck in a very similar bind. Deal or no deal: Ursula von der Leyen, European Commission President, shook Trump’s hand on a 15% tariff cap in Scotland last July, and Brussels recognised that the cap would shrink cars too.

Yet the reality looks different. However, US tariffs of 50% on EU steel and 25% on autos remain. German carmakers are sounding alarms. So far, the agreement has brought no clarity or relief to the German car makers, said Hildegard Müller, president of Germany’s auto trade body VDA. It’s costing them, she said, billions.

Japan and Korea signed with Washington in July. Auto tariffs will be reduced to 15% , and steel duties will be cut, it was said. Cars get different treatment, with a 25% auto tariff still hitting Japanese and Korean automakers.

Japan’s top trade negotiator, Ryosei Akazawa, said: “We’re still seeing an impact; the bleeding has not stopped. Freed said he believes one Japanese automaker is taking the hit to nearly ¥100 million ($680,000) per hour due to the tariff weight.

South Korea is among those pushing for relief. Bloomberg Intelligence estimates that Hyundai and Kia could incur up to $5 billion in additional expenses this year. The squeeze on margins and weakening global demand have also made the 15% tariff bite.

US hints at more tariffs to come, Canada imposes D.C. tariffs

Instead of easing duties, Washington has been trending in the opposite direction; rather than lifting duties, the latest moves slap additional tariffs on Chinese imports. The move came just weeks after Washington expanded the list of tariffs to nearly 300 new steel and aluminum product codes, covering 50% US tariffs, on August 15. That expansion took effect immediately.

The shake-up has angered partners who are hoping for concessions. EU officials have blamed disagreements over digital trade rules for a hold-up in the promised joint statement with Washington. Those countries, Japan and South Korea, have been waiting for executive orders to seal the tariff relief.

Critics have begun to question Washington’s commitment. Cecilia Malmström, the EU’s former trade commissioner, said that permanent delays must be avoided to prevent the process from becoming endless negotiations and excessive filibustering.

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