The UK-US trade deal has come into force today, slashing US export tariffs for the UK’s automotive and aerospace sectors.
Automotive and aerospace manufacturers will benefit from significant tariff reductions when exporting to the US, potentially saving thousands of jobs, after the landmark trade deal takes effect.
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 companies like Rolls-Royce become more competitive and continue to be at the cutting edge of innovation.
These changes are a significant win for both sectors and will help ensure that UK manufacturers remain globally competitive, protect British jobs, and continue to lead in innovation and excellence.
Safeguarding auto and aerospace jobs in the UK
Today’s announcement demonstrates the kind of agile, sector-specific agreement outlined in the UK’s Trade Strategy, which was designed to deliver rapid, practical benefits for British businesses and workers in key industries.
Business and Trade Secretary Jonathan Reynolds explained: “We agreed this deal with the US to protect jobs and support growth in some of our most vital sectors, and today, we’re delivering on that promise for the UK’s world-class automotive and aerospace industries.
“British car manufacturers can now export to the US at a significantly reduced 10% tariff rate – down from 27.5% – and aerospace goods will see 10% tariffs removed, saving sectors hundreds of millions each year and safeguarding thousands of jobs.”
Global tariffs on steel and aluminium removed
The government has worked with the US and all parts of the UK industry to build a quota system that is as simple, fair, and effective as possible.
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 Prime Minister and President Trump have again confirmed, this will continue to progress and move towards achieving 0% tariffs on core steel products, as agreed.
“From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy,” said Prime Minister Keir Starmer.
“We will always act in the national interest – backing British businesses and workers, and delivering on our Plan for Change.”
Industry support for auto and aerospace tariff slashes
Since the announcement of the UK-US trade deal, professionals in the auto and aerospace sectors have come forward to share their support for this historic tariff reduction.
Mike Hawes, Chief Executive of SMMT, stated: “The implementation of the new trading agreement between the UK and US is good news for US customers and a huge relief for the UK automotive companies that export to this critically important market.
“It immediately slashes 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.”
He added: “Combined with the new Industrial and Trade Strategies that have automotive at their heart, UK companies can look to the future with more optimism.”
Government continues to lower burdens on UK businesses
This deal is one of many international agreements the UK Government has secured recently to boost the nation’s economy, including a trade deal with India which will add £4.8bn to the UK economy and £2.2bn in wages every year, and a renewed EU deal which will add nearly £9bn to the economy by 2040 on SPS and emissions measures alone.
Today’s announcement is the result of work being done at pace between both governments to lower the burden on UK businesses, especially those sectors most impacted by the tariffs.
The government will now update Parliament on the implementation of quotas on US beef and ethanol, as part of its commitment to the US under this deal.
