(qlmbusinessnews.com . Tue 17th Jun, 2025) London, UK —
UK-US Tariff Agreement: Major Boost for British Automotive Sector Announced
In a significant development for transatlantic trade relations, President Donald Trump has enacted an executive order that will reduce the tariffs imposed on British cars entering the United States. This move acts on a portion of a tariff agreement forged last month between the UK and the US.
The announcement came during the G7 summit in Canada, where UK Prime Minister Sir Keir Starmer heralded the change as a “very important day” for both nations. The agreement comes after intense negotiations aimed at implementing aspects of the deal, designed to protect British enterprises from the widespread tariffs initiated by Trump.
However, the deal also imposes a 10% tariff on the majority of UK goods, including vehicles, but falls short of addressing the anticipated elimination of steel import charges. This first significant trade agreement announced by the White House this year follows Trump's earlier decision to levy tariffs on a broad range of goods entering the US, aiming to bolster the domestic market.
Despite this, the agreement has sparked controversy, given that it does not fully remove tariffs on steel, a critical export for the UK. Trump, hinting at future adjustments, stated that details regarding steel and aluminium would be disclosed soon. The UK government expressed its intention to continue pushing for zero tariffs on core steel products, as originally agreed.
The agreement, which will take effect seven days after its publication, also removes tariffs on select aerospace products, marking a mutual step forward in car tariffs and aerospace between the two nations. Trump reassured the UK of its protection under this deal, attributing his favourability towards the country as a reason.
This development has been warmly welcomed by Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders in the UK, who sees it as a significant boost for the automotive sector with immediate impacts. The Business and Trade Secretary Jonathan Reynolds highlighted the swift collaboration between the two governments to alleviate pressures on UK businesses. Additionally, the agreement promises updates on the import quotas for US beef and ethanol, indicating a potential increase in beef quotas to 13,000 metric tonnes while ensuring the maintenance of food safety standards in the UK.
Although ministers have lauded this deal along with other trade agreements with the European Union and India, it's important to note that the scope of the US-UK tariff agreement is considerably more limited than a comprehensive trade deal. Critics, including Conservative party leader Kemi Badenoch, have dismissed the agreement as insufficient, emphasizing the disparity between expectations and the actual breadth of the deal. Nonetheless, Trump has praised Sir Keir for achieving what has eluded others for years, underlining the importance of this partnership despite the criticisms.
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