A trade deal between the US and the UK announced by President Donald Trump on Thursday will see British-made vehicles imported into America subject to a reduced tariff of 10 per cent.
Following more than a month of negotiations between UK ministers and US officials, the UK has been granted a reprieve from sweeping levies on foreign-made products announced by Trump on April 2 – a day he called ‘Liberation Day’.
This included a 25 per cent tariff on new cars imported into the US.
US Secretary of Commerce Howard Lutnick confirmed that the eye-watering levies on cars will be eased with a quota of 100,000 units a year that will be charged at a lower rate of 10 per cent.
The UK last year exported 102,000 units to the US worth a collective £9billion. This makes it the second largest overseas market for British-built motors only behind Europe.
Responding to the news, Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said the agreement was ‘great news for the industry and consumers’ and would alleviate barriers that were set to be a ‘severe and immediate threat to UK automotive exporters’.
A trade deal between the US and the UK announced by President Donald Trump on Thursday will see British-made vehicles imported into America subject to a reduced tariff of 10%
The 100k quota at the reduced 10 per cent rate suggest anything over that number would be hit by the higher 25 per cent figure.
However, speaking at Jaguar Land Rover’s Halewood factory in the West Midlands ahead of a scheduled press conference on Thursday, Prime Ministers Sir Keir Starmer suggested the quota of 100,000 cars is ‘not fixed’ and could be increased to further protect British businesses.
No details have yet to be given on the proposed 25 per cent tariffs on car parts.
When announced by the US President last month, a think tank warned the punitive tariffs would put 25,000 UK jobs in the automotive manufacturing sector at risk.
The Institute for Public Policy Research said the levies on UK-made cars entering the United States – which would have made Range Rovers almost $30,000 pricier when sold in the country – would have put ‘extreme pressure’ on Britain’s car makers and ‘threaten jobs and economic growth’.
Announcing the deal from the White House’s Oval Office, President Trump said: ‘I’m thrilled to announce a breakthrough trade deal. The agreement with one our closest and most cherished allies.
‘Final details are being written up and will be detailed in the coming weeks.’
Starmer added: ‘This is a really fantastic historic day. A real tribute to the history we have of working together. ‘This [deal] is going to boost trade.’
He went on to call it a ‘historic deal’ that puts Britain at the front of the queue.
Announcing the deal from the White House’s Oval Office, President Trump said: ‘I’m thrilled to announce a breakthrough trade deal. The agreement with one our closest and most cherished allies’
Some 16.9% of the 603,595 cars produced for export last year – accounting for 102k units – were shipped to the US. These vehicles had an estimated combined value of £9bn
A think tank had previously warned that Trump’s sweeping 25% tariffs on US car imports would put 25,000 UK jobs in the automotive manufacturing sector at risk
The news will come as a major relief to some of the nation’s most influential car makers, not least JLR.
Last month, the Range Rover producer announced it had paused shipments to the US as it worked to ‘address the new trading terms’.
It added that it was ‘taking some short-term actions including a shipment pause’ as ‘we develop our mid to longer-term plans’.
Adrian Mardell, CEO at JLR, said: ‘The car industry is vital to the UK’s economic prosperity, sustaining 250,000 jobs.
‘We warmly welcome this deal which secures greater certainty for our sector and the communities it supports.
‘We would like to thank the UK and US Governments for agreeing this deal at pace and look forward to continued engagement over the coming months.’
The news will come as a major relief to some of the nation’s most influential car makers, not least JLR
Last month, the Range Rover producer announced it had paused shipments to the US as it worked to ‘address the new trading terms’
JLR CEO Adrian Mardell shaking hands with Prime Minister Keir Starmer today at the car maker’s Halewood plant in the West Midlands. Mardell said: ‘We warmly welcome this deal which secures greater certainty for our sector and the communities it supports’
The US is also the biggest market for British prestige motor brands, notably Aston Martin.
Just days ago it announced it would be cutting exports to the United States in response to the 25 per cent levies.
The British-based luxury car maker said was going to let American dealerships run down stock amid the uncertainty.
North America is also Rolls-Royce Motor Cars’ largest sales region, accounting for around a third of the 5,712 luxury models it produced at its Goodwood facility last year. It is also the biggest market for Crewe-based premium vehicle maker, Bentley.
McLaren – which exclusively makes supercars in Britain at its production centre in Woking – delivers more cars to North America than anywhere else globally, with almost half of its outputs shipped to the US.
BMW’s Plant Oxford, where Minis are produced for global markets including America, was also on course to take a huge hit from the additional tariffs.
North America is Rolls-Royce Motor Cars’ largest sales region of all
US deliveries accounted for around a third of the 5,712 luxury models Rolls-Royce produced at its Goodwood facility last year
The US is also the biggest market for British sports car maker, Aston Martin, which announced just days ago that it would be cutting exports to the US in response to the 25% levies
Bentley, which produces cars at its Crewe factory, sells most of its cars in the Americas too
McLaren – which exclusively makes supercars in Britain at its production centre in Woking – delivers more cars to North America than anywhere else globally
Mini’s Cowley factory in Oxford, which produces cars for the US market, was also on course to take a huge hit from the additional tariffs announced by President Trump on Liberation Day
Reacting to the announcement, the SMMT’s Mike Hawes commented: ‘The agreement announced today to reduce tariffs on UK car exports into the US is great news for the industry and consumers.
‘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 SMMT’s Mike Hawes welcomed the reduced tariffs, saying the 25% levies would have been a ‘severe and immediate threat to UK automotive exporters’
Sue Robinson, chief exec at the National Franchised Dealers Association, added: ‘We welcome the agreement between the UK and United States to reduce tariffs and strengthen trade ties.
‘This is a positive step that brings much-needed reassurance to businesses involved in transatlantic trade, including many of our dealer members and their manufacturing partners.
‘This deal represents a significant opportunity for the UK automotive sector. Lower tariffs will help enhance the competitiveness of UK-built vehicles in the US market, support long-term investment, and streamline the flow of goods across borders.
‘We are optimistic about the benefits this will bring to dealers, manufacturers, and consumers alike.
‘The agreement comes at a pivotal moment for the industry, which continues to face pressures from inflation, evolving regulations, and the shift to zero-emission vehicles.
‘Greater certainty and a stable trade environment will be essential in helping the sector plan for the future.’
