UK-US Trade Deal Comes into Effect from Today

The UK car and aerospace manufacturers will benefit from major tariff reductions when exporting to the US, saving thousands of jobs, as the landmark UK-US trade deal which came into effect from Monday.

The UK is the only country to have secured this deal with the US, reducing car export tariffs from 27.5% to 10%, saving manufacturers hundreds of millions each year and protecting hundreds of thousands of jobs.

At the same time, the aerospace sector has seen the removal of 10% tariffs on goods such as engines and aircraft parts, helping make companies such as Rolls Royce more competitive and allow them to continue to be at the cutting edge of innovation.

These changes are a huge win for both sectors and will help ensure the UK car and aerospace manufacturers remain globally competitive, protect British jobs and continue to lead in innovation and excellence.

This deal is one of many international agreements this government has secured recently to boost the UK’s economy, including a trade deal with India which will add $6.59 billion to the UK economy and $3.02 billion in wages every year, and a renewed EU deal which will add nearly $12.36 billion to the UK economy by 2040 on SPS and emissions measures alone. Today’s announcement is the result of work happening at pace between both governments to lower the burden on UK businesses, especially the sectors most impacted by the tariffs. We will now update Parliament on the implementation of quotas on US beef and ethanol, as part of our commitment to the US under this deal. 

Key Industries Safeguarded

The UK Prime Minister Keir Starmer said that the trade deal with the US delivers for the British businesses and protects jobs. From today, the UK’s world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to the country’s economy.

“We will always act in the national interest backing British businesses and workers, delivering on our Plan for Change,” he said.

The UK’s Business and Trade Secretary Jonathan Reynolds said that the government has agreed this deal with the US to protect jobs and support growth in some of the country’s most vital sectors, and they were delivering on that promise for the UK’s world-class automotive and aerospace industries.

“This is a clear example of our Plan for Change in action: cutting costs for businesses, speeding up delivery of trade benefits, and helping UK industries thrive in a challenging global environment,” Reynolds said.

The deal has immediately slashed the punitive tariffs that brought the US export market to a standstill and threatened the viability of some of the most famous names in British manufacturing.

Securing the deal – the first and, so far, only automotive deal in place with the administration – is a diplomatic coup and provides a foundation on which to grow trade in the future. Combined with the new Industrial and Trade Strategies that have automotive at their heart, UK companies can look to the future with more optimism.

Thanks to the UK-US deal, the UK is the only country to be exempt from the global tariff of 50% on steel and aluminium. As the UK Prime Minister and the US President Donald Trump have again confirmed, the government will continue go further and make progress towards 0% tariffs on core steel products as agreed.