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When push comes to shove, the question of whether British industry faces crippling tariffs on exports to the US or enjoys a unique opportunity to grow may come back to three seemingly random words: “melted and poured”.

To see why, let’s begin by recapping where we are at present in the soap opera of US trade policy.

Donald Trump has just doubled the extra tariffs charged on imports of steel and aluminium into the US from 25% to 50%. In essence, this would turn a painfully high tariff into something closer to an insurmountable economic wall (remember during the Cold War, the Iron Curtain equated to an effective tariff rate of just under 50%).

Anyway, the good news for UK steel producers is that they have been spared the 50% rate and will, for the time being, only have to pay the 25% rate.

But there is a sting in the tail: that stay of execution will only last until 9 July – on the basis of President Trump’s most recent pronouncements.

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Trump to double steel tariffs to 50%

For anyone following these events from the corner of their eyes, this might all sound a little odd. After all, didn’t Sir Keir Starmer announce only a few weeks ago that British steel and aluminium makers would be able to enjoy not 25% but 0% tariffs with America, thanks to his bold new trade agreement with the US? Well, yes. But the prime minister wasn’t being entirely clear about what that meant in practice.

Because the reality is that every trade agreement works more or less as follows: politicians negotiate a “heads of terms” agreement – a vague set of principles and red lines. There then follows a period of horse-trading and negotiation to nail down the actual details and turn it into a black and white piece of law.

In this case, when the PM and president made their big announcement 28 days ago, they had only agreed on the “heads of terms”. The small print was yet to be completed.

Right now, we are still in the horse-trading phase. Negotiators from the UK and the US are meeting routinely to try and nail down the small print. And that process is taking longer than many had expected. To see why, it’s worth drilling a little bit into the details.

The trade deal committed to allowing some cars to pass into the US at a 10% rate and to protecting some pharmaceutical trade, as well as allowing some steel and aluminium into the US at a zero tariff rate.

When it comes to cars, there are some nuances about which kind of cars the deal covers. Something similar goes for pharmaceuticals. Things get even knottier when you drill into the detail on steel.

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The role of steel in the UK economy

You see, one of the things the White House is nervous about is the prospect that Britain might become a kind of assembly point for steel from other countries around the world – that you could just ship some steel to Britain, get it pressed or rolled or worked over and then sent across to the US with those 0% tariffs. So the US negotiators are insisting that only steel that is “melted and poured” in the UK (in other words, smelted in a furnace) is covered by the trade deal.

That’s fine for some producers but not for others. One of Britain’s biggest steel exporters is Tata Steel, which makes a lot of steel that gets turned into tin cans you find on American supermarket shelves (not to mention piping used by the oil trade). Up until recently, that steel was indeed “melted and poured” from the blast furnaces at Port Talbot.

But Tata shut down those blast furnaces last year, intending to replace them with cleaner electric arc furnaces. And in the intervening period, it’s importing raw steel instead from the Netherlands and India and then running it through its mills.

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Or consider the situation at British Steel. There in Scunthorpe they are melting and pouring the steel from iron made in their blast furnaces – but now ponder this. While the company has been semi-nationalised by the government, it is still technically a Chinese business, owned by Jingye. In other words, its steel might technically count as benefiting China – which is something the White House is even more sensitive about.

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You see how this is all suddenly becoming a bit more complicated than it might at first have looked? This helps to explain why the negotiations are taking longer than expected.

But this brings us to the big problem. The White House has indicated that Britain will only be spared that 50% tariff rate provided the trade deal is finalised by 9 July. That gives the negotiators another month and a bit. That might sound like a lot, but now consider that that would be one of the fastest announcement-to-completion rates ever achieved in any trade negotiations in modern history.

There’s no guarantee Britain will actually get this deal done in time for that deadline – though insiders tell me they think they could be able to finalise it in a piecemeal fashion: the cars one week, steel another, pharmaceuticals another. Either way, the heat is on. Just when you thought Britain was in the safe zone, it stands on the edge of jeopardy all over again.

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Ryanair urges EU chief to ‘quit’ over air traffic strike disruption

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Ryanair urges EU chief to 'quit' over air traffic strike disruption

The boss of Ryanair has told Sky News the president of the European Commission should “quit” if she can’t stop disruption caused by repeated French air traffic control strikes.

Michael O’Leary, the group chief executive of Europe’s largest airline by passenger numbers, said in an interview with Business Live that Ursula von der Leyen had failed to get to grips, at an EU level, with interruption to overflights following several recent disputes in France.

The latest action began on Thursday and is due to conclude later today, forcing thousands of flights to be delayed and cancelled through French airspace closures.

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Mr O’Leary told presenter Darren McCaffrey that French domestic flights were given priority during ATC strikes and other nations, including Italy and Greece, had solved the problem through minimum service legislation.

He claimed that the vast majority of flights, cancelled over two days of action that began on Thursday, would have been able to operate under similar rules.

Mr O’Leary said of the EU’s role: “We continue to call on Ursula von der Leyen – why are you not protecting these overflights, why is the single market for air travel being disrupted by a tiny number of French air traffic controllers?

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File photo dated 02/09/22 of a Ryanair Boeing 737-8AS passenger airliner comes in to land at Stansted Airport in Essex. Ryanair has revealed around 63,000 of its passengers saw their flights cancelled during last week's air traffic control failure which caused widespread disruption across the industry and left thousands of passengers stranded overseas. In its August traffic update, the Irish carrier said more than 350 of its flights were cancelled on August 28 and 29 due to the air traffic contr
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Ryanair has cancelled more than 400 flights over two days due to the action in France. File pic: PA

“All we get is a shrug of their shoulders and ‘there’s nothing we can do’. We point out, there is.”

He added: “We are calling on Ursula von der Leyen, who preaches about competitiveness and reforming Europe, if you’re not willing to protect or fix overflights then quit and let somebody more effective do the job.”

The strike is estimated, by the Airlines for Europe lobby group to have led to at least 1,500 cancelled flights, leaving 300,000 travellers unable to make their journeys.

Ryanair chief executive Michael O'Leary speaks to journalists during a press conference at The Alex Hotel in Dublin. Picture date: Thursday October 3, 2024.
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Michael O’Leary believes the EU can take action on competition grounds. Pic: PA

Ryanair itself had axed more than 400 flights so far, Mr O’Leary said. Rival easyJet said on Thursday that it had cancelled 274 services over the two days.

The beginning of July marks the start of the European summer holiday season.

The French civil aviation agency DGAC had already told airlines to cancel 40% of flights covering the three main Paris airports on Friday ahead of the walkout – a dispute over staffing levels and equipment quality.

Mr O’Leary described those safety issues as “nonsense” and said twhile the controllers had a right to strike, they did not have the right to close the sky.

DGAC has warned of delays and further severe disruption heading into the weekend.

Many planes and crews will be out of position.

Mr O’Leary is not alone in expressing his frustration.

The French transport minister Philippe Tabarot has denounced the action and the reasons for it.

“The idea is to disturb as many people as possible,” he said in an interview with CNews.

Passengers are being advised that if your flight is cancelled, the airline must either give you a refund or book you on an alternative flight.

If you have booked a return flight and the outbound leg is cancelled, you can claim the full cost of the return ticket back from your airline.

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CBI kicks off search for successor to ‘saviour’ Soames

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CBI kicks off search for successor to 'saviour' Soames

The CBI has begun a search for a successor to Rupert Soames, its chairman, as it continues its recovery from the crisis which brought it to the brink of collapse in 2023.

Sky News has learnt that the business lobbying group’s nominations committee has engaged headhunters to assist with a hunt for its next corporate figurehead.

Mr Soames, the grandson of Sir Winston Churchill, was recruited by the CBI in late 2023 with the organisation lurching towards insolvency after an exodus of members.

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The group’s handling of a sexual misconduct scandal saw it forced to secure emergency funding from a group of banks, even as it was frozen out of meetings with government ministers.

One prominent CBI member described Mr Soames on Thursday as the group’s “saviour”.

“Without his ability to bring members back, the organisation wouldn’t exist today,” they claimed.

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Rupert Soames
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Rupert Soames. Pic: Reuters

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Mr Soames and Rain Newton-Smith, the CBI chief executive, have partly restored its influence in Whitehall, although many doubt that it will ever be able to credibly reclaim its former status as ‘the voice of British business’.

Its next chair, who is also likely to be drawn from a leading listed company boardroom, will take over from Mr Soames early next year.

Egon Zehnder International is handling the search for the CBI.

“The CBI chair’s term typically runs for two years and Rupert Soames will end his term in early 2026,” a CBI spokesperson said.

“In line with good governance, we have begun the search for a successor to ensure continuity and a smooth transition.”

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Ryanair and easyJet cancel hundreds of flights over air traffic control strike

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Ryanair and easyJet cancel hundreds of flights over air traffic control strike

Ryanair and easyJet have cancelled hundreds of flights as a French air traffic controllers strike looms.

Ryanair, Europe’s largest airline by passenger numbers, said it had axed 170 services amid a plea by French authorities for airlines to reduce flights at Paris airports by 40% on Friday.

EasyJet said it was cancelling 274 flights during the action, which is due to begin later as part of a row over staffing numbers and ageing equipment.

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The owner of British Airways, IAG, said it was planning to use larger aircraft to minimise disruption for its own passengers.

The industrial action is set to affect all flights using French airspace, leading to wider cancellations and delays across Europe and the wider world.

Ryanair said its cancellations, covering both days, would hit services to and from France, and also flights over the country to destinations such as the UK, Greece, Spain and Ireland.

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Group chief executive Michael O’Leary has campaigned for a European Union-led shake-up of air traffic control services in a bid to prevent such disruptive strikes, which have proved common in recent years.

He described the latest action as “recreational”.

Michael O'Leary. Pic: Reuters
Image:
Michael O’Leary. Pic: Reuters

“Once again, European families are held to ransom by French air traffic controllers going on strike,” he said.

“It is not acceptable that overflights over French airspace en route to their destination are being cancelled/delayed as a result of yet another French ATC strike.

“It makes no sense and is abundantly unfair on EU passengers and families going on holidays.”

Ryanair is demanding the EU ensure that air traffic services are fully staffed for the first wave of daily departures, as well as to protect overflights during national strikes.

“These two splendid reforms would eliminate 90% of all ATC delays and cancellations, and protect EU passengers from these repeated and avoidable ATC disruptions due to yet another French ATC strike,” Mr O’Leary added.

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