STEEL unions have welcomed a government package worth up to £2.5 billion to secure the industry’s future after US President Donald Trump’s threat to impose a 25 per cent import tariff on its products.

Announcing the funding, Business Secretary Jonathan Reynolds said the tariff, due to come into force next month, would cause damage on both sides of the Atlantic.

A consultation has been launched on the long-term issues facing the sector, such as high electricity costs, unfair trading practices and scrap metal recycling.

Unite general secretary Sharon Graham said: “The launching of the steel strategy is a critical landmark for a foundation industry, whose success is essential to the wellbeing of our economy and our national security.

“It is the first time in decades that a government has made a positive commitment to invest in the UK steel industry.

“It is essential that all such investment is clearly linked to rock-solid job guarantees.”

Community general secretary Roy Rickhuss said: “After a long era of neglect under the previous government, we welcome the government’s firm commitment to our steel industry.”

GMB national secretary Andy Prendergast said: “After years of dithering, today’s plan provides desperately needed funding for our once proud, now beleaguered steel industry.

“As the world becomes more volatile, primary domestic steel-making capacity is vital for both our economy and domestic security.”

Mr Reynolds told the BBC’s Sunday With Laura Kuenssberg that there “is the basis for constructive engagement” between Britain and US on tariffs, but “I’m not saying it’s easy.”

Help for the steel industry will be available through the National Wealth Fund, which ministers said could benefit areas including Scunthorpe, Rotherham, Redcar and Scotland.

Funds will be spent on initiatives, such as electric arc furnaces,  aimed at giving steel a long-term future.

Mr Reynolds admitted that the arc furnaces, though more environmentally friendly, require fewer workers, so their introduction would lead to job losses in the industry. However, he added that there “could be more jobs in steel in the UK” if demand could be created.

TUC general secretary Paul Nowak said: “If we want to make more products here in Britain and compete globally, we need to be able to produce steel here.”

The government has approved an expansion of Heathrow airport, which will require 400,000 tonnes of steel.