UK-US trade agreement is now in force

A landmark trade deal between the United Kingdom and the United States has become effective today.

The deal slashes export tariffs for Britain’s automotive and aerospace sectors, significantly benefiting UK manufacturers.

Under the agreement, American levies on British car exports have been slashed from an off-putting 27.5% to a much-improved 10% quota rate, meaning multi-million pound annual savings for manufacturers.

The aerospace sector also benefits, with 10% tariffs on key goods like aircraft engines and parts, helping companies like Rolls-Royce remain competitive globally.

UK secures exclusive US tariff deal, safeguarding jobs and reviving export growth

Prime Minister Keir Starmer hailed the deal as a “historic” win, stating, “Our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy. We will always act in the national interest — backing British businesses and workers, delivering on our Plan for Change.”

The UK is currently the only country to have secured such an arrangement with the US, with the deal seen as a major diplomatic and economic success.

Business and Trade Secretary Jonathan Reynolds said the government prioritized protecting jobs and stimulating growth.

He noted that British car manufacturers can now export to the US at a significantly reduced 10% tariff rate, and aerospace goods will see tariffs removed altogether, saving sectors hundreds of millions each year and safeguarding thousands of jobs.

Industry leaders have welcomed the move. Kevin Craven, CEO of ADS, called the tariff removal a “welcome” development, emphasizing the aerospace sector’s contribution of over 100,000 highly skilled jobs across the UK.

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), said the agreement is “a huge relief for UK automotive companies” and “a diplomatic coup,” crediting the simplified quota system for helping to revive stalled exports.

UK pushes for zero tariffs on steel 

In addition to benefits for the auto and aerospace sectors, the UK remains exempt from the US’s 50% global tariffs on steel and aluminum. Unless a deal is reached, the sector could face elevated tariffs starting July 9.

Still, according to a British statement, the current developments further pave the way for future progress toward zero tariffs on core steel products.

Today’s announcement is part of a broader UK trade strategy focused on agile, sector-specific deals that deliver immediate economic returns. The government also cited recent agreements with India and the EU, which are projected to add billions to the UK economy in the coming years.

Parliament will be updated on implementing quotas on US beef and ethanol imports in the coming days, which are part of the UK’s reciprocal commitments under the deal.

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