U.S. Makes Revised Deal Slashing Import Tariffs for U.K. Automakers
The U.S. and the U.K. have confirmed a limited trade deal to reduce tariffs on U.K. vehicle imports from 27.5% to 10%. Discounted levies on auto part imports are not part of the agreement, and the decreased tariffs have a limit of 100,000 cars annually. Jaguar Land Rover, which sends the most vehicles to the U.S. out of any automaker, sold about 95,000 cars last year in the U.S., according to The New York Times. The U.K. as a whole exported around 102,000 total cars to the U.S. in 2024, according to Automotive Logistics. In April, Jaguar Land Rover announced it was pausing shipments to the U.S. because of tariff impacts, but resumed vehicle exports earlier this week. The Trump administration is also cutting U.K. steel and aluminum import tariffs from 25% to 0% with quotas, which have yet to be announced, and will allow Rolls-Royce to export engines and plane parts into the U.S. tariff-free. In return, the U.K. slashed its 19% tariff on imported ethanol from the U.S. to 0%. Since 2021, the U.K.'s standard unleaded fuel, E10 petrol, has contained up to 10% ethanol.
When finalized, the tariff reduction deal will be the U.S.'s first of its kind with another nation, and some domestic automakers aren't happy about it. "The U.S. automotive industry is highly integrated with Canada and Mexico; the same is not true for the U.S. and the U.K. We are disappointed that the administration prioritized the U.K. ahead of our North American partners," said American Automotive Policy Council President Matt Blunt. The council represents the U.S.' "big three" automakers; Ford, Stellantis, and General Motors (GM). Current tariff policy states that USMCA-compliant (United States-Mexico-Canada Agreement) auto parts are temporarily exempt from tariffs, but USMCA-compliant vehicles imported into the U.S. from Canada and Mexico face tariffs on their non-U.S. content.
Matt Blunt added: "Under this deal, it will now be cheaper to import a U.K. vehicle with very little U.S. content than a USMCA-compliant vehicle from Mexico or Canada that is half American parts." Cars are the U.K.'s largest export to the U.S., worth around £9 billion ($11.9 billion) in 2024, according to the BBC. "The car industry is vital to the U.K.'s economic prosperity, sustaining 250,000 jobs. We warmly welcome this deal which secures greater certainty for our sector and the communities it supports," Jaguar Land Rover CEO Adrian Mardell said according to Ars Technica.
American Automotive Policy Council President Matt Blunt is unsurprisingly dissatisfied with the President's prioritization of foreign automakers over domestic ones. A portion of Blunt's release read: "We hope this preferential access for U.K. vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors." Still, the U.K.-U.S. deal is more symbolic, as it will likely have a limited impact. Most U.K. automakers, such as Jaguar Land Rover, operate at the higher end of the pricing spectrum, restricting their overall U.S. market presence despite strong sales in the luxury segment.
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