In a rare joint move between the rivals, Indian steelmaker Tata Steel has bought steel plates from British Steel for use at its Tata Steel UK subsidiary Port Talbot in the UK in an attempt to circumvent US tariffs, according to a Guardian report. The deal highlights how geopolitical trade tensions and industrial issues are reshaping the UK steel industry.
The strategy follows Trump's proposed rule requiring steel to be "melted and bottled" in the UK in order to qualify for zero percent tariffs. Meanwhile, although the US has agreed to reduce UK steel tariffs to zero percent, the implementation of zero tariffs has been suspended as concerns have been raised that other countries could use the UK as a backdoor. The UK is currently facing a 25% tariff, still lower than the 50% tariff applied to other importers.
Tata Steel's transition strategy
Tata Steel UK closed its blast furnaces last year to switch to cleaner electric arc furnaces. In anticipation of the completion of the EDP, the company relied on imported slabs from factories in the Netherlands and India. Purchases at British Steel's Scunthorpe plant offered a shorter-term and cost-effective alternative.
