Green’s Dictionary of Slang

1. a fool, a gullible person [mug n.¹ (2a)].

1932		‘P.P.’ Rhy. Sl.
1941		V. Davis Phenomena in Crime 253: Blacking a steam-tug. Blackmailing a ‘mug’ (or victim).
1954		R. Fabian London After Dark 53: They call him, in thieves’ vernacular, ‘The Steamer’, which is rhyming slang that derives from ‘steam-tug’ and still signifies ‘Mug’.
1969		S.T. Kendall Up the Frog.
1977		D. Powis Signs of Crime 202: Steamer A mug or fool (Steam tug).

2. a bug.

1932		‘P.P.’ Rhy. Sl.
a.1945		L. Payne private coll. n.p.: Bug Steam Tug.
1960		J. Franklyn Dict. of Rhy. Sl.
1976		(ref. to 1930s) R. Barnes Coronation Cups and Jam Jars 57: They were also known as Hearth Rugs, or Steam Tugs to the well-initiated.
2002		Pete’s Aussie Sl. Home Page 🌐 steam tug(s) (2): bug(s).

3. (Aus.) a pug, i.e. a prize-fighter.

2002

Pete’s Aussie Sl. Home Page 🌐 steam tug (1): a pug, prize fighter .