LONDON: A new U.K.-U.S. trade deal took effect Monday, granting British car exports preferential tariff rates while leaving final levies on metal shipments unresolved.
The agreement, the first Washington has struck since President Donald Trump announced reciprocal tariffs in April, imposes a blanket 10% duty on most British goods entering the U.S. For autos, the first 100,000 vehicles exported annually will face a 10% tariff, with any additional shipments taxed at 25%.
Last year, around 102,000 British-made cars were shipped to the U.S., according to the Society of Motor Manufacturers and Traders (SMMT), an influential auto trade group. The U.S. is the largest global buyer of British cars, accounting for 27.4% of all U.K. auto exports in 2023.
The new rates mark a sharp drop from the 50% tariffs applied to vehicles from other U.S. trade partners. The deal also eliminates duties on British aerospace products.
However, negotiations continue over steel and aluminum exports. While the U.K. benefits from a preferential 25% tariff — half the rate imposed on other nations — both governments have discussed eventually reducing it to 0%. The U.S. is the fourth-largest export market for British steel.
“We will continue to go further and make progress towards 0% tariffs on core steel products as agreed,” the U.K. government said Monday.
Prime Minister Keir Starmer hailed the agreement as “historic,” saying it safeguards “key industries vital to our economy” and protects jobs.
Mike Hawes, SMMT’s chief executive, called the deal “a huge relief” for British automakers. “It immediately slashes the punitive tariffs that brought the U.S. export market to a standstill and threatened the viability of some of the most famous names in British manufacturing,” he said in a statement.
The U.S. maintains a trade surplus in goods with Britain, exporting more than it imports. Cars remain the U.K.’s top export to the U.S.