The government has taken British Steel into domestic hands, following a long running battle over ownership of one of the UK’s most important production sites and blast furnaces.
Elsewhere in the news, fresh data released shows a marginal gain in UK GDP growth while the US has hit Brazil with 25% tariffs only days ahead of an expected release of the new ‘reciprocal tariff’ regime.
Steel nationalisation
The UK has nationalised British Steel, in one of the final moves of Sir Keir Starmer’s premiership.
Following the passage of the Steel Industry (Nationalisation) Bill, the Department for Business and Trade (DBT) said that ministers concluded that taking over British Steel “was necessary to protect the UK’s national interest.”
A new leadership team is set to be appointed after talks with the former owners, Jingye, failed to produce an acceptable outcome.
This appears to bring to an end a long-running saga over the company’s Scunthorpe plant, which was rescued from closure following an emergency intervention by the government in April 2025.
The government said that the move was made to prevent the furnaces being shut down, after Jingye said it would do so immediately.
Business and trade secretary Peter Kyle said that he took the decision in order to “secure steelmaking capability and maintain production in the national interest."
“British Steel now belongs to the British people, and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.”
The need to protect the UK’s domestic steel production has come into the national conversation recently, with DBT’s recent steel strategy aiming for 50% of steel used in the UK to be produced domestically and a new regime that raises quotas and slashes tariffs on imported steel.
Trade and GDP
New figures from the Office for National Statistics (ONS) found that GDP grew by 0.7% in the three months to April, with a further 0.1% growth in May, marking the sixth consecutive period of three-month on three-month growth.
The growth was driven mostly by the services sector, which expanded by 0.7%, while production also rose by 0.1%.
The value of the UK’s goods imports increased in May, according to ONS’ monthly trade stats. Overall, this value rose by £0.5bn in May, while exports also rose by £1.5bn.
A major part of this increased goods exports was a rise in chemical sales of both pharmaceutical products and inorganic chemicals to the US.
James Smith, an analyst from Dutch bank ING, said he expected growth to slow down later on in the year, matching similar annual GDP patterns since 2022, while also raising questions about the data itself.
“There is still an active debate over how reflective this is of the underlying growth picture,” Smith said, pointing to other economic surveys such as the Bank of England’s Decision Maker Panel, private payrolls and the monthly Purchasing Managers’ Index.
US hits Brazil with tariffs
The US Trade Representative (USTR) has announced another series of tariffs on Brazil.
USTR Jamieson Greer said that a 25% tariff would apply on most Brazilian exports to the US, with certain exemptions to products like coffee, steel scrap and tropical fruit, citing a variety of actions by Brazil’s governments against US interests.
“Safeguarding American economic interests against unfair trade practices is the bedrock of President Trump’s America First policies,” Greer said in the statement.
These are separate from the ‘reciprocal tariffs’ imposed on most countries trading with the US and follow a long history of antagonism between US President Donald Trump and Brazilian counterpart Luiz Inácio Lula da Silva.
Lula faces re-election against Flávio Bolsonaro, son of former president Jair and a key ally of Trump and his family, in October. Trump has attempted to use sanctions to pressure Brazil into releasing the older Bolsonaro, who was convicted of organising a military coup following his loss in the 2022 election to Lula.
Lula has also called Trump a “pirate” in recent days over the latter’s actions in the Middle East and has positioned himself as a key defender of Latin American interests against Trump.
The final set of global tariffs is expected at some point before 24 July, at which point the ‘interim’ rate will no longer apply, following the conclusion of a series of US investigations into purported failures to tackle slave labour in the supply chains of dozens of countries across the world.
Deborah Elms, head of trade Policy at the Hinrich Foundation, said that the outcome of today’s decision “may give important clues about the likely treatment of other, newer Section 301 cases such as the one against 60 countries for failing to properly enforce imports that might be made by forced labor.”
Other headlines
- Fighting has continued in the Middle East and Strait of Hormuz for a sixth consecutive day
- Starmer told parliament yesterday “this is the end of my political journey” in his final outing at Prime Minister’s Questions
- Politicians in the European Parliament are sparring over who takes the next presidency of the chamber, as incumbent Roberta Metsola is expected to be readying a re-election bid
Yesterday in trade
- The UK-India Comprehensive Economic and Trade Agreement (CETA) came into effect
- DBT announced a consultation on a series of trade negotiations with Indonesia, the Philippines, the UAE and Uruguay
- The US Senate advanced a new sanctions bill against Russia
