London seeks US-EU alliance to counter Chinese oversupply and defend domestic industry
The British government is exploring the creation of a three-way “steel alliance” with the United States and the European Union to shield domestic producers from a surge of cheap, state-subsidised Chinese metal that has flooded global markets.
Trade minister Sir Chris Bryant told the Financial Times that London was in “continuous discussions” with Washington and Brussels over what he described as a “1950s-style tariff pact”, an echo of the post-war European Coal and Steel Community that helped rebuild the continent’s industrial base.
“We’re in continuous discussion about how we could make this happen,” Bryant said.
“Whether it’s a three-way [alliance], a two-way, and if so, which two-way, we’re looking at all options.”
A modern ‘ring of steel’
The idea would see the UK, EU and US form a coordinated bloc imposing common tariffs on steel imports from outside the group, while trading freely among themselves.
The aim, Bryant said, was to create a “ring of steel” to defend against unfairly subsidised production, much of it originating from China, which has driven global overcapacity to crisis levels.
According to the OECD, worldwide overproduction reached 600 million tonnes last year, nearly a quarter of total capacity, and is forecast to rise to 721 million tonnes by 2027. China alone produces around 1 billion tonnes annually.
The glut has led both Washington and Brussels to raise trade barriers. US President Donald Trump recently reinstated 50% on steel imports citing national security grounds, while the EU this month unveiled plans to impose the same level of tariffs from July next year, halving existing import quotas.
The UK, which negotiated a 25% tariff in a bilateral deal with Washington last month, is expected to publish its own revised safeguard measures before its current regime expires in June 2026.
Pressure on British producers
Britain’s steel industry has long warned that it faces an existential threat without stronger protection against cheap imports. The EU’s planned restrictions, in particular, raised fears that diverted Chinese steel could be redirected to the UK market, undercutting domestic mills already struggling with high energy costs and decarbonisation pressures.
“An alliance between like-minded countries would be a breakthrough in resolving the global overcapacity issue,” said Gareth Stace, director-general of UK Steel.
“It would prevent heavily subsidised steel from ravaging what is left of the steel industries in the developed world.”
Bryant said the UK was having “constructive discussions” with Brussels, including bilateral talks with Germany, to secure preferential treatment for British steel exporters when the EU’s new rules take effect. He expressed confidence that Britain could obtain “a better deal than the general,” possibly through higher quotas or product exemptions.
Echoes of post-war cooperation
The trade minister drew a historical parallel with the creation of the European Coal and Steel Community in 1951, which bound six nations, Belgium, France, West Germany, Italy, the Netherlands and Luxembourg, into a single market for raw materials vital to economic and defence resilience.
“It does feel remarkably like the 1950s,” Bryant said.
“Europe talking about a steel deal again.”
While the concept of a transatlantic steel club is not new, the EU and US began exploring a “global arrangement” on steel and aluminium tariffs in 2021, previous efforts failed to reach agreement. However, officials in both London and Berlin now suggest there is renewed momentum to coordinate a united response to China’s industrial dominance.
The German economics ministry confirmed that Berlin and London “share a fundamental interest” in tackling global steel overcapacity and said further talks are planned.
Urgency for action
Bryant conceded that time is running short, with the UK’s existing tariff protections set to lapse next summer.
“There’s a degree of urgency,” he said, promising that the government’s own steel strategy would be published “soon.”
If successful, the initiative could mark Britain’s first major post-Brexit trade alignment with both Washington and Brussels, a symbolic return to multilateral cooperation on industrial policy.
For an industry that once forged the backbone of British manufacturing, the hope is that a new “steel alliance” could finally give it the protection it needs to survive the next industrial revolution.
