US-UK trade deal eases tariffs, boosting UK car exports

In a significant development for the UK automotive industry, a new trade agreement between the United States and the United Kingdom has been finalised, offering substantial relief to British car manufacturers. Under the terms of the deal, the US has agreed to reduce tariffs on British-made cars from 27.5% to 10% for up to 100,000 vehicles annually.

This tariff reduction is poised to benefit UK-based carmakers, particularly those specialising in luxury vehicles. Jaguar Land Rover (JLR), which exports a significant portion of its vehicles to the US, stands to gain considerably. The company had previously paused exports to the US due to the high tariffs but is now expected to resume shipments, including its upcoming electric models.

Similarly, Aston Martin and Rolls-Royce have welcomed the deal, with both companies experiencing a surge in share prices following the announcement.

“The application of these tariffs was a severe and immediate threat to UK automotive exporters so this deal will provide much needed relief, allowing both the industry, and those that work in it, to approach the future more positively.

“Government has recognised the importance of the automotive industry to UK exports and the wider economy and has worked quickly and tirelessly with US counterparts to strike an agreement. We hope that it will lead to broader and deeper cooperation that reduces barriers to trade still further, charting a path to economic growth for both nations.”

The trade deal is anticipated to protect up to 150,000 jobs in the UK, particularly in sectors like steel, aluminium, and car manufacturing. By reducing tariffs, the agreement aims to provide stability to industries that were facing significant challenges due to previous trade barriers.

However, some opposition figures have criticised the deal for lacking comprehensive coverage, particularly concerning sectors like pharmaceuticals and digital services.

“Open competition is the only way forward for consumer choice and allows the best products and brands to thrive – not just for cars but for every product. We’ve stepped back from the brink here and we welcome the clarity and certainty this brings.”

While the current agreement marks a positive step for UK car manufacturers, industry leaders are advocating for further negotiations to expand the scope of the deal. There is a call for additional reductions in trade barriers and the inclusion of more sectors to ensure long-term economic benefits for both countries.