US President Donald Trump speaks in the Oval Office of the White House as he announces reciprocal tariffs, AFP.
Prime Minister Keir Starmer's Labour administration said it was stumping up to £2.5 billion ($3.2 billion) to help support the sector.
It also launched a consultation looking at how to "protect the steel sector from unfair trading practices abroad" and reduce high electricity costs.
"The UK steel industry has a long-term future under this government," Business Secretary Jonathan Reynolds said in a statement.
The announcement came days after US President Donald Trump said he would impose 25 per cent tariffs on steel and aluminium imports from 12 March.
Canada, Mexico and Brazil are among the biggest steel exporters to the United States, followed by South Korea.
Britain exports about 10 per cent of its steel to the US, shipping nearly £400 million ($495 million) worth there in 2023.
The UK's steel industry body has said the tariff plan would be a "devastating blow".
Starmer's government says it is "engaging" with Trump's administration "to work through the detail" of his announcement.
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