The UK and US have just agreed on a new deal that makes it cheaper to send British-made cars to America. President Donald Trump signed off on the agreement, which cuts tariffs (aka import taxes) on up to 100,000 UK cars – reducing them from 25% to 10%.
This is part of a wider agreement the two countries began working on last month. While the UK government hopes it’ll help protect British businesses from Trump’s recent wave of import taxes, not everything made the cut.
What’s Actually in the Deal?
- Cars: Good news for UK carmakers – they can now export vehicles to the US with a 10% tax instead of the punishing 25% tariff introduced earlier this year. It’s a step in the right direction, though still more expensive than the 2.5% rate that was in place before the recent trade tensions.
- Steel & Aluminium: No solid progress yet. The UK wants lower tariffs (currently 25%) on steel and aluminium, but the US hasn’t made any promises. Trump said more info would come “in a little while.”
- Aerospace: Some tariffs on aerospace parts have been lifted.
Why It Matters
This agreement isn’t the massive free-trade deal that’s been talked about for years. It’s much smaller in scope and doesn’t cover major sectors like tech or financial services. In fact, Trump can’t actually sign a full free-trade deal without Congress getting involved.
Still, carmakers are breathing a sigh of relief. Mike Hawes, boss of the Society of Motor Manufacturers and Traders, said the deal offers “huge reassurance” and gives UK brands a bit of an edge over European competitors like Germany and Italy, who are still stuck with higher US tariffs.
Jaguar Land Rover (JLR) had even paused exports to the US earlier this year while waiting for this agreement to be finalised.
Is This a Big Win? Depends Who You Ask.
Prime Minister Sir Keir Starmer called it “a very important day” and a sign of strength in the UK-US relationship.
But not everyone’s impressed. Some say it’s just a “tiny tariff deal” rather than a game-changing agreement.
Either way, the new rules will kick in seven days after the deal is officially published. So if you’re into UK-built cars like Jaguars, Minis or Land Rovers, you might start seeing a few more on American roads soon.
