A new trade deal between the UK and the US has just landed, and it’s good news kind of — British-made cars heading to America will now face lower tariffs. But there’s a limit, and it could slow down UK carmakers who are hoping to grow.
Earlier this year, President Trump slapped a massive 25% tariff on foreign cars coming into the US. It caused a major shake-up in the UK car industry — the US is one of our biggest export markets. Jaguar Land Rover and Aston Martin even hit pause on US shipments while waiting to see what happened next.
Fast forward to now, and there’s a deal on the table: the tariff has been cut to 10%, but only for the first 100,000 cars exported from the UK each year. Sell any more than that, and the 25% fee kicks back in.
Trump called it “an incredible day for America” and claimed it’s “so good for both countries”. But let’s not forget — even a 10% tariff is way steeper than what was in place under the previous Biden administration.
Labour leader Keir Starmer, speaking from Jaguar Land Rover’s West Midlands plant, responded by saying, “The question we should be asking is, ‘is it better than where we were yesterday?’”
The cap is a big deal too. Last year, the UK exported basically 100,000 cars to the US — meaning we’ve already hit the ceiling. That leaves no room for growth without triggering higher tariffs, which could put a brake on business.
Mike Hawes, boss of the UK’s Society of Motor Manufacturers and Traders, said the deal brings “much-needed relief” and shows the government understands how important car exports are to our economy. But he also hinted this should just be the beginning — hopefully leading to more trade-friendly deals in the future.
