Somers Forge, a manufacturer of bespoke steel parts for the aerospace, automotive and nuclear industries based in the English midlands, has operated a US sales office for more than 30 years.
In April, the branch will close, a victim of tariffs on steel imports introduced in 2018 ago on national security grounds by then president Donald Trump.
“We’ve held on and held on with the hope that our government would succeed in revoking them [the tariffs],” said Tammy Inglis, finance director at Somers Forge, one of Britain’s biggest forgings specialists. “We are now into our fourth year and with all the added manufacturing costs, in particular the high energy costs, we can’t subsidise the branch any more. It’s not sustainable.”
Under the terms of the tariffs, US importers can apply for exemptions on certain products if they cannot be sourced domestically but Somers Forge is among dozens of small and medium-sized UK specialists that have been hit. Trade body UK Steel estimates that exports to the US have fallen from 351,000 tonnes in 2017 to just over 190,000 in 2020.
The US and the EU last October agreed to suspend the tariffs — 25 per cent on steel and 10 per cent on aluminium to manufacturers from the bloc — from January 1 but the UK government failed to secure a matching breakthrough.
The UK industry was already at a competitive disadvantage to European peers because of higher energy costs, an issue that has become even more critical amid the recent surge in wholesale gas and electricity prices. Somers Forge is among companies that have raised concerns with the government over costs.
Japan on Monday reached a similar deal with the US, with Washington announcing that it would suspend the 25 per cent levy on imports up to a certain quantity. The agreement does not cover aluminium.
The Financial Times reported in December that the US was delaying a deal with Britain because of concerns over London’s threats to change post-Brexit trading rules in Northern Ireland. Talks between the UK and the US on the issue restarted last month but for Somers Forge a deal, even if it comes this month, will be too late to reverse the decision to close its Michigan-based site.