Mathew Carr

The Undermining by Trump of UK: How Protectionism Disrupted Climate Action, Green Steel (1)

Opinion by Mathew Carr*
The nationalisation of British Steel at Scunthorpe highlights how undermining trade policies championed by Donald Trump disrupted international climate action and the commercial-environmental collaboration between the UK and China.
It’s a case study in how the weak-as-water UK administration of Keir Starmer is letting the US get away with climate murder as he lets our supposed ally simultaneously sabotage our economy.
Now, Steel importers into the UK will face two distinct, major tariff financial obligations starting over the next year: a 50% trade tariff starting on 1 July 2026 — next month –, followed by a direct carbon border tax between £30 and £130 per tonne of steel starting on 1 January 2027.
The Catch-22: UK construction companies want to buy European green steel to meet their net-zero building targets. However, because the UK cannot currently produce enough low-carbon steel domestically, the 1 July quota limits mean British buyers will face inflated prices or product shortages. [1, 2, 3]
This could hurt UK economic growth by boosting costs and inflation.
Fundamental sabotage
While the collapse of the 2020 partnership between the UK government and China’s Jingye Group was hastened by some domestic economic pressures, the overarching framework of aggressive US tariff barriers fundamentally hurt the viability of cross-border investments aimed at industrial decarbonisation.
From a strategic perspective, Jingye Group’s 2020 acquisition of British Steel was a commercial venture designed to bridge Chinese capital with a critical Western manufacturing hub.
For the UK, the partnership offered a potential lifeline to preserve heavy industry while navigating a complex transition toward net-zero targets.
For Jingye, the investment was intended to establish a footprint in Europe, effectively allowing it to navigate around international trade barriers.
Yet Trump seems to hate nothing more than when others succeed.
The re-emergence of expansive US tariff frameworks last year—most notably the implementation of sweeping 25% to 50% tariffs on steel imports—fundamentally dismantled the financial logic of this cross-border arrangement [Asiatimes, The Guardian].
This situation illustrates a broader tension in global trade dynamics: the friction between professed — or fake –market liberalism and targeted economic protectionism.
While United States trade policy historically emphasizes open, competitive global markets, the strategic deployment of aggressive tariffs effectively insulates domestic heavy industries from foreign competition.
When emerging economies, particularly China, establish significant competitive advantages in manufacturing capacity and supply chain integration, the introduction of defensive trade barriers alters the global playing field.
That is….when Trump realises he’s losing in the market, he cheats….he repeatedly does this because so-called leaders like Starmer rarely call him out.
Now, the UK could place big tariffs on US big tech, but it’s not because it is in Trump’s pocket.
Critics of the US administration argue its approach shifts the rules of global commerce when domestic industries — especially in China — risk pushing ahead in the race for modern industrial competitiveness.
(The US is the only nation wanting to dominate. China and Russia have shown they are willing to collaborate, yet those efforts have been undermined by the US over the past two decades.)
The direct casualty of this economic friction is coordinated climate action.
Heavy industries like steel production require immense capital to transition from carbon-intensive, coal-fired blast furnaces to sustainable alternatives, such as green electric arc furnaces.
Because the escalating trade hostilities cut off British Steel’s access to vital export markets like the United States, the Scunthorpe operation under Chinese ownership began losing an estimated £700,000 per day.
This severe financial bleeding stripped away the commercial justification for Jingye to invest the billions required for a green transition.
Faced with a choice between upholding a Chinese-backed commercial venture or maintaining vital economic alignment with Washington, the UK government chose the latter — even though the US is no longer behaving like an ally.
The UK matched the protectionist environment by slashing its own tariff-free steel quotas, effectively ending the collaboration.
Consequently, instead of a privately funded modernised upgrade, the burden of decarbonising the plant has been transferred entirely to the UK taxpayer, costing billions of pounds in public subsidies to meet the impending 2027 Carbon Border Adjustment Mechanism (CBAM) deadlines.
The Scunthorpe crisis demonstrates that when major global powers prioritize unilateral trade barriers over bilateral commercial trust, the international collaboration necessary to achieve global climate targets are blown up.
*with help from Google Gemini

NOTES

Britain’s Carbon Border Adjustment Mechanism (CBAM) is legally scheduled to go live on 1 January 2027. [1, 2]
While the tax is not currently active, the government has completed major legislative milestones to prepare for its launch next year: [3, 4, 5]

Current Legislative Status

  • Primary Legislation Passed: The legal foundation for the tax was officially enacted via the Finance Act 2026, which granted HM Revenue and Customs (HMRC) the power to run and enforce the system. [3]
  • Secondary Legislation Finalised: Throughout the spring of 2026, the government ran intensive technical consultations on draft regulations covering administrative provisions, emissions verification, and tax calculations. The final regulatory framework is expected to be laid before Parliament later this year. [2]

How the UK System Will Work

Once active in 2027, the UK CBAM will apply a carbon tax directly to high-emission industrial imports to prevent “carbon leakage” (companies moving production to countries with weaker environmental laws). [1, 2]
  • The Sectors in Scope: The tax will initially cover imports of aluminium, cement, fertiliser, hydrogen, and iron & steel. (Plans to include glass and ceramics were dropped after industry feedback). [1, 2, 6, 7]
  • The Threshold: Unlike the EU’s weight-based system, the UK tax will only trigger if a business imports more than £50,000 worth of covered goods within a specified rolling period. [2]
  • No Transition Period: Unlike the EU—which used a multi-year reporting-only phase—the UK CBAM will be fully operational with financial obligations from day one on 1 January 2027. [2]

Contrast with the European Union (EU CBAM)

If you are currently experiencing carbon border adjustments, you are likely dealing with the EU’s CBAM, which is ahead of the UK timeline. The EU system officially entered its “definitive phase” on 1 January 2026, meaning EU importers are already tracking emissions that will incur direct financial liabilities starting in 2027. [2, 8]
If your business imports or exports these industrial materials, I can outline how to calculate your projected emissions liability or detail what information your overseas suppliers need to provide to comply with the upcoming rules. Which would be most helpful?
AND
Steel importers into the UK will face two distinct, major tariff financial obligations starting over the next year: a 50% trade tariff starting on 1 July 2026, followed by a direct carbon border tax between £30 and £130 per tonne of steel starting on 1 January 2027. [1, 2]
Because the UK is tightening its borders to protect the domestic steel industry and meet net-zero timelines, the costs are structured across two specific phases:

Phase 1: The New Steel Trade Tariffs (Starting 1 July 2026) [3, 4]

Before the CBAM tax even goes live, the UK government is implementing an aggressive trade mechanism designed to curb foreign overcapacity: [5]
  • The Penalty: The government is cutting existing tariff-free steel import quotas by 60%.
  • The Cost: If a business exceeds its allocated quota, it must pay a sweeping 50% out-of-quota tariff on any additional steel entering the country. [2, 5, 6]

Phase 2: The UK CBAM Carbon Tax (Starting 1 January 2027) [4, 7]

Once the Carbon Border Adjustment Mechanism (CBAM) officially launches, steel importers will pay a variable tax based on the “embedded carbon emissions” of the steel they purchase. [8, 9]
  • The Projected Price: Industry analysis forecasts a cost increase of £30 to £130 per tonne on carbon-intensive steel imports. [1]
  • How the Rate is Calculated: HM Revenue & Customs (HMRC) will calculate a specific sectoral rate for steel every quarter. The rate will track the market price of the UK Emissions Trading Scheme (UK ETS)—which sits around £49.41 per tonne of CO2—adjusted to account for remaining free carbon allowances distributed to domestic producers. [9, 10, 11]
  • The Payment Deadline: Importers will have to calculate their total emissions for the 2027 calendar year and make their first physical tax payment to HMRC by 31 May 2028. [12]

Who is Exempt From the Tax?

  • Small Importers: A business is entirely exempt from CBAM reporting and payments if the total value of its imported CBAM goods stays under £50,000 over a rolling 12-month period. [13, 14]
  • Green Steel Producers: If your overseas supplier uses low-emission technologies (like Electric Arc Furnaces), their certified carbon footprint will be minimal, meaning they will pay little to nothing. [1]
  • European Union Suppliers (Potential): The UK and EU are actively negotiating a formal link between their respective Emissions Trading Schemes. If finalised, steel imports originating from the EU will be mutually exempt from the UK CBAM, as they have already paid a comparable carbon price at home. [15, 16, 17]
If you are trying to map out your supply chain costs for next year, I can explain how to check if your specific steel type falls under the £50,000 exemption limit, or detail how to claim Carbon Price Relief if your supplier already pays a carbon tax in their home country. Let me know which would help you prepare. [1, 12, 18]

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