Ministers have been warned that ‘time is running out’ for the steel industry after it was excluded from a US-UK tariff deal that came into effect yesterday.

The agreement between Donald Trump and Keir Starmer spares car and aerospace firms in Britain from the swingeing duties imposed on their rivals elsewhere in the world. But the steel and aluminium sectors – which were originally included in the deal when it was first announced nearly two months ago – are still exposed to the heavy US import charges.

The situation makes a mockery of Starmer’s claim when the deal was announced in May that it ‘delivers on his promise to save UK steel’. 

Despite Labour’s spin, the beleaguered industry – which employs thousands at sites including Tata Steel in South Wales and British Steel in Scunthorpe – remains in limbo.

Gareth Stace, director-general of industry body UK Steel, said: ‘Time is running out to secure a UK-US steel deal and remove damaging tariffs. Every day of delay costs our steel-makers dearly. 

'Contracts are being lost, investment decisions remain on hold, and uncertainty is paralysing business decisions.’

The Trump administration imposed steep tariffs on the global car, aerospace, and steel and aluminium industries earlier this year.

The US-UK deal reduces the pain for car makers, which have seen duties on sales into the US reduced from 27.5 per cent to 10 per cent – though they are still higher than the 2.5 per cent levels seen before.

For aerospace firms such as Rolls-Royce, tariffs have been reduced from 10 per cent to zero, though UK firms may still be indirectly affected if they are part of supply chains that criss-cross global markets.

Business Secretary Jonathan Reynolds said it would safeguard thousands of jobs.

It was described as a ‘huge relief’ by the car industry body Society of Motor Manufacturers and Traders (SMMT).

Losing out from the deal are UK makers of bioethanol, a fuel component, after the deal scrapped tariffs on imports from the US – prompting fears that two British plants could close with the loss of hundreds of jobs.

And Britain’s beleaguered steel industry continues to face 25 per cent tariffs despite an agreement to bring them down to zero.

It has been spared a further increase to 50 per cent that was applied to steel and aluminium companies in the rest of the world. 

However, that reprieve only lasts until July 9. Talks aimed at securing a tariff-free deal have foundered over rules on where steel produced in the UK comes from.

Britain’s biggest plant at Port Talbot, operated by India’s Tata Steel, imports semi-finished products which are processed there – casting doubt, under American rules, on the steel being classified as originating in the UK.

Steel makers face a double blow from the tariffs: they make it harder to sell to customers in America and mean that cheap goods from elsewhere, barred from the US, are flooding the British market.