The UK and US have announced that they have agreed a trade deal to slash import tariffs on cars made it Britain.
President Trump raised tariffs to 25% in March but has now agreed to reduce them to 10% for 100,000 cars a year.
Speaking from Jaguar Land Rover’s factory in the West Midlands, UK Prime Minister Sir Keir Starmer said: “This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.”
The announcement of a new deal on import tariffs on cars has been welcomed by the automotive industry, which had warned that 25% tariffs threatened thousands of UK jobs.
SMMT response
SMMT chief executive Mike Hawes said: “The agreement to reduce tariffs on UK car exports into the US is great news for the industry and consumers. 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, and those that work in it, to approach the future more positively.
“Government has recognised the importance of the automotive industry to UK exports and the wider economy and has worked quickly and tirelessly with US counterparts to strike an agreement. We hope that it will lead to broader and deeper cooperation that reduces barriers to trade still further, charting a path to economic growth for both nations.”
IMI welcomes news
The deal has also been welcomed by the IMI.
In a statement Hayley Pells, policy and government affairs lead, said: “As the US remains one of the most important automotive export markets, this deal delivers much-needed certainty for UK businesses and strengthens global competitiveness.
“However, market access only addresses one aspect of the sector’s current challenges. The enormous skills gap, currently at 17,000 vacancies, threatens the UK’s ability to keep pace with change and remain competitive.
“IMI research shows that due to an ageing workforce, 144,000 roles (19% of the workforce) may need replacing by 2032 due to retirement. Those who are going to feed those vacancies will need to meet the demands of electrification, autonomous vehicles, and evolving customer expectations.
“This was recognised in Parliament on 7 May, where the IMI’s data was cited multiple times during the Automotive Manufacturing: Employment debate. MPs from across the House echoed the IMI’s call for targeted investment in apprenticeships, technical training, and adult reskilling, all of which are critical to ensure the sector is future-ready.
“The IMI also hopes that the government’s long-awaited Industrial Strategy will place the automotive sector at the heart of the UK’s growth agenda. Alongside R&D, trade, and energy policy, workforce development must be a central pillar.”
NFDA backs deal
Meanwhile, Sue Robinson, chief executive of the National Franchised Dealers Association, said: “We welcome the agreement between the UK and United States to reduce tariffs and strengthen trade ties. This is a positive step that brings much-needed reassurance to businesses involved in transatlantic trade, including many of our dealer members and their manufacturing partners.
“This deal represents a significant opportunity for the UK automotive sector. Lower tariffs will help enhance the competitiveness of UK-built vehicles in the US market, support long-term investment, and streamline the flow of goods across borders. We are optimistic about the benefits this will bring to dealers, manufacturers, and consumers alike.
“The agreement comes at a pivotal moment for the industry, which continues to face pressures from inflation, evolving regulations, and the shift to zero-emission vehicles. Greater certainty and a stable trade environment will be essential in helping the sector plan for the future.”
