U.K.-U.S trade deal cutting tariffs on cars, beef, ethanol goes live

UPI

30-06-2025

A British-American trade deal meaning the vast majority of British car exports to the United States will be subject to a preferential 10% tariff rate, compared with 27.5% for all other countries, came into effect Monday. File Photo by Phil McCarten/UPI | License Photo
June 30 (UPI) -- A tariff-busting trade deal between Britain and the United States came into force Monday, slashing U.S. tariffs on imports of British cars, including Jaguar, Range Rover, Aston Martin and Mini by 17.5% to 10% and eliminating a 10% tariff on aerospace sales such as jet engines and aircraft parts.
The Department of Business and Trade said in a news release that the "landmark" deal would protect significant numbers of British jobs and save two key industries hundreds of millions of dollars a year lost from higher prices to U.S. customers and stressed that Britain was the only country to have secured this deal with the United States.
It said the auto industry employed hundreds of thousands of people, while removing the 10% tariff on imports of aero engines and aircraft parts would make companies in the sector, including Rolls Royce, a major global manufacturer of jet engines, more competitive and enable them to keep driving technological advances.
The deal on cars is subject to a 100,000-unit annual quota, roughly equivalent to all vehicles sold to the United States in 2024, which were worth $12.4 billion with an average price of $121,000, according to Office for National Statistics figures.
In return, Britain will axe tariffs of 20% and 19% on imports of U.S. beef and ethanol and hike the tariff-free quota to 13,000 tons and 370 million gallons a year, respectively.
Hailing the so-called Economic Prosperity agreement, which was finalized with U.S. President Donald Trump two weeks ago on the sidelines of the G7 summit in Canada, Prime Minister Keir Starmer said the deal would benefit critical British industries.
"Our historic trade deal with the United States delivers for British businesses and protects U.K. jobs. From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy," he said.
"We will always act in the national interest -- backing British businesses and workers, delivering on our Plan for Change."
Britain was the first country to negotiate a deal after Trump announced what he said were reciprocal tariffs on the United States' trading partners on April 2, as high as 49%. Britain escaped with a baseline 10% goods tariff, the lowest of any major trade partner.
U.K. steel and aluminum exports to the United States were slapped with a 25% tariff, in line with all other countries, when Trump unveiled the new import duties in March -- which he said were aimed at reviving domestic production -- but received a interim exemption from a doubling to 50% imposed Trump on June 4.
The Business and Trade Department insisted negotiations to permanently remove the entire tariff were on track despite the waiver expiration date fast approaching in just over a week on July 9, saying Starmer and Trumo "again confirmed, we will continue go further and make progress towards 0% tariffs on core steel products as agreed."
Sheffield-based Marecgaglia told the BBC that even the initial 25% was making selling to the United States a "lot tougher," and that the potential hike to 50% would be a "massive headache."
The company's stainless steel products are made in the United States, but the materials such as rods and bars are shipped from the U.K.
"The lead times to get it to the plant are longer than the nine days left for the negotiations. That means I would be shipping something -- and a ship will probably have around $4.1 to $5.5 million of product on it -- and I don't know will I be paying $2.1 million duty on it or zero? said managing director Liam Bates.
"So it gives us an extremely hard decision to make as to how we can continue production in the US," he added.