Steel or no deal

The UK government has said it’s ‘disappointed’ that the US has imposed a 25% tariff on all steel products imported into the US. The UK has not announced any tariffs in response - it hopes it can secure “a wider economic agreement, through a rapid dialogue” with the US, precluding the adoption of these tariffs. In contrast, Canada and the EU have announced a series of retaliatory tariffs against the US measures.

The logic may be that the UK government believes that, as a now independent trading nation (unlike the EU bloc), it can quickly assess, identify and propose a value-based deal benefiting the US and the UK. Maybe, but on its own, this is hope and not pre-planned action or strategy.

The clock is ticking; the UK is paying more now, which is only advantageous for the US (and disadvantageous to the UK Steel industry). To change this situation, the UK needs to create an interest for the US to agree to something different. Without sufficient interest, the ensuing procrastination, delay and/or postponement only benefits the existing US position.

Over the past few weeks, we’ve seen what happens when this US administration receives what it perceives as publicly made threats, sanctions and pushback – increased emotion, retaliation and negativity. So, in some ways, if the UK has chosen not to jump into the centre of this storm, it makes sense. In difficult negotiations, we should always be asking ourselves the following about information we have that the other side doesn’t know about yet, i.e. surprises:

Should this be said? (Will this structure expectations positively or negatively – if yes, in private or public?)

Should this be said now? (If I wait, will things be better or worse in the future?)

Should this be said now - by me? (If things go wrong, can I escalate the matter?)

I don’t know what is going on behind closed doors, but I hope it’s something like this:

Kier and his people say to Donald, in private, “Look we understand that you don’t want to set a precedent just for us at this stage, but please understand that if we can’t reach a trade deal by X date, we will reluctantly need to apply 25% steel tariffs retrospectively from today’s date”. In other words, keep this negotiation variable in play (or keep the plate spinning if you prefer) – gestures of goodwill only have a short shelf life.

Then, deliver a detailed, specific proposal that can create incremental, sustained value for both countries, subject to the suspension of all recent tariffs. Don’t forget to ask, “Is this acceptable, Donald?” at the end.

Keir, happy to discuss this further with you. Please ask your people to contact my people. 😉

13th March 2025

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