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<\/a><\/p>\nTax applies to first 100,000 cars exported from UK to US; reduced from a previously announced 25% rate<\/p>\n
US president Donald Trump and UK prime minister Keir Starmer have officially signed the\u00a0deal that rubber stamps the UK’s reduced 10% levy when importing cars to the states.<\/p>\n
As agreed last month,\u00a0UK-made vehicles\u00a0will be hit with a reduced tariff\u00a0for the first 100,000 cars that touch ground in the US.<\/p>\n
It follows more than a month of negotiations\u00a0between British and American\u00a0officials after Trump announced sweeping\u00a0import\u00a0 tariffs on foreign-made products, including\u00a0a 25% tariff\u00a0on new cars.<\/p>\n
All tariffs were due to start on 1 April, but a 90-day reprieve was given so that\u00a0negotiations could take place.<\/p>\n
The two leaders\u00a0have now announced the signing of the order on Tuesday during their visits to the G7 summit in Canada. Starmer called it “a very important day” for both countries.<\/p>\n
Details on the new deal are still currently sparse, but the US confirmed that the 10% tariff – which brings it in line with the levy on other foreign goods \u2013 will apply to “100,000 cars”, suggesting that anything over that number will be hit by the higher 25% rate.\u00a0Previously, before Trump’s March announcement, the tariff was 2.5%.\u00a0<\/p>\n
When it was announced in May, Starmer said the 10% rate represented\u00a0“a huge and important reduction” and confirmed that\u00a0“we have scope now to increase that quota;\u00a0this is not final”.\u00a0<\/p>\n
Last year, the UK sent some 102,000 cars to the US.\u00a0 The US is the British car industry’s second largest export market, behind the EU. It received\u00a027% of all UK-made vehicles \u00a0in 2024, accounting for some \u00a39 billion a year.<\/p>\n
No details were given on the proposed\u00a025% tariff\u00a0on car parts,\u00a0which was due to begin in the coming months.<\/p>\n
While details have yet to be fully confirmed, new deals on food,\u00a0chemicals, machinery and industry have been struck. Tariffs on steel and aluminum have\u00a0been reduced to 0%.<\/p>\n
The UK is the first nation to reach an agreement with the US following president Trump’s tariff announcement in March. China\u00a0will be the next, according to American officials.<\/p>\n
Announcing the deal from the White House, Trump said: “I\u2019m thrilled to announce a breakthrough trade deal.\u00a0The agreement with one our closest and most cherished allies.<\/p>\n
“Final details are being written up and\u00a0will be detailed in the coming weeks.”<\/p>\n
He added that the deal\u00a0gets rid of many unspecified UK\u00a0tariffs that \u201cunfairly discriminated\u201d against US, saying:\u00a0\u201cThey are opening up their country. Their current is a little closed.”<\/p>\n
Starmer said: “This is a really fantastic, historic day \u2013\u00a0a\u00a0real tribute to the history we have of working together. This [deal] is\u00a0going to boost trade.”<\/p>\n
In response to the news, Society of Motor Manufacturers and Traders boss Mike Hawes said: “The agreement to reduce tariffs on UK car exports into the US is great news for the industry and consumers.<\/p>\n
“The application of these tariffs was a severe and immediate threat to UK automotive exporters, so this deal will provide much needed relief, allowing both the industry\u00a0and those that work in it\u00a0to approach the future more positively.”<\/p>\n
The news marks a major step down from Trump’s March announcement, when he signed a bill that penalised\u00a0all car makers importing cars into the US market.<\/p>\n
At the time, Trump said the decision was made because of the imbalance of American-made car sales in other markets\u00a0and claimed the\u00a0move would lead to “tremendous growth” for the US automotive industry.\u00a0<\/p>\n
Around eight million cars were imported into the US last year, approximately half the total sold in the market.\u00a0Most were from Mexico, Canada, Germany and Japan.<\/p>\n
The news will offer relief to the UK\u2019s car makers, especially JLR (Jaguar<\/a> Land Rover<\/a>),\u00a0which counts the US as its biggest market, having sent 130,000 cars there in 2024.\u00a0It last month paused shipments to the US<\/a> as it worked to \u201caddress the new trading terms\u201d.<\/p>\n Speaking today, JLR CEO Adrian Mardell said: \u201cThe car industry is vital to the UK\u2019s economic prosperity, sustaining 250,000 jobs. We warmly welcome this deal which brings greater certainty for our sector and the communities it supports.<\/p>\n “We would like to thank the UK and US Governments for agreeing this deal at pace and look forward to continued engagement over the coming months.\u201d<\/p>\n Mini<\/a>\u00a0will also\u00a0welcome the news, given that the Mini Cooper<\/a>\u00a0hatchback, which\u00a0has recorded a near-doubling in US sales so far this year, is made at Oxford.<\/p>\n