Patricia Hewitt, the Trade and Industry Secretary, is to press US President George W Bush to exclude Britain's largest steel maker, Corus, from the import tariffs to be introduced next week.
In a move that will test the mettle of one of Labour's rising stars, Ms Hewitt will argue for the exclusion because Corus produces specialist steels not available from US producers.
Earlier this month, President Bush announced the US would impose tariffs of between 8 and 30 per cent on steel imports, to take effect on Wednesday.
The move – widely condemned by governments around the world – threatens to sour Anglo-American trade relations and depress European steel prices.
Corus executives, led by chairman Sir Brian Moffat, met with Department of Trade and Industry officials last week to thrash out details of the submission to the US.
Ms Hewitt will argue that 85 per cent of Corus steel destined for the US but affected by the tariffs should be excluded. The 110,000 tonnes of steel is supplied to customers in the car, aerospace, oil and gas sectors.
Industry insiders said that if Ms Hewitt fails to argue for the exclusions, Corus would be forced to reduce capacity at its Rotherham and Stocksbridge plants in South Yorkshire. This could lead to significant job losses in Labour's heartland.
Corus also produces steel for US customers at its IJmui- den plant in the Netherlands. The Dutch government is expected to approach US officials separately about possible exclusions from the tariffs.
On top of this, the European Union has vowed to seek compensation from the US for loss of trade. The case will be made on Tuesday when representatives from the World Trade Organisation meet US officials in Geneva.
Corus is tomorrow expec- ted to detail its plans to cope with the tariffs when it presents its annual results.
The company has already completed an extensive restructuring which led to 25 per cent of its UK workforce being made redundant and the removal of 3 million tonnes of steel capacity. It has been rewarded with a rally in its shares, closing on Friday at almost their highest level since July 2000. But analysts are worried there is little more Corus can do internally to respond to the US threat.
Investment bank Deutsche Bank predicts Corus will report sales of around £7.7bn, producing an operating loss of £422m. But the company's chief executive, Tony Pedder, dubbed Dr Death by staff because of his association with the job cuts, is expected to report a positive outlook for the second half of 2002, notwithstanding the row with the US.Reuse content