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Tariffs

Historic UK-US Trade Deal Takes Effect, Bringing Tariff Cuts for Car and Aerospace Sectors

Strategic Insights

— 2 min read

The historic UK-US trade deal has finally come into effect, eight weeks after it was hailed as a "fantastic" breakthrough for both countries. The deal, which was announced in May and implemented on June 30, brings significant tariff cuts for the UK car and aerospace sectors, but a 25 per cent levy on steel will still apply. The prime minister welcomed the implementation of the agreement, which he said "delivers for British businesses and protects UK jobs." The deal is seen as a coup for the prime minister, who resisted calls to retaliate against the US and instead ploughed a diplomatic furrow.

Key Takeaways:

  • The UK-US trade deal, announced in May, has finally come into effect, bringing significant tariff cuts for the UK car and aerospace sectors.
  • The deal slashes tariffs affecting the UK car sector from 27.5 per cent to 10 per cent, saving hundreds of millions of pounds every year and supporting hundreds of thousands of jobs.
  • The aerospace sector has seen the removal of 10 per cent tariffs on goods like engines and aircraft parts, helping companies such as Rolls Royce.
  • A 25 per cent levy on steel imports will remain in place until another deal can be hammered out between both sides.
  • The deal will help protect the UK's steel industry, which has been under pressure due to high tariffs.
  • Conservative leader Kemi Badenoch criticized the deal, saying the UK had been "shafted" and that businesses would have to pay more due to the higher tariffs on steel.
  • The prime minister resisted calls to retaliate against the US and instead ploughed a diplomatic furrow to secure the deal.

Statistics:

  • Tariffs affecting the UK car sector have been reduced from 27.5 per cent to 10 per cent.
  • The deal would save hundreds of millions of pounds every year and support hundreds of thousands of jobs.
  • The aerospace sector has seen the removal of 10 per cent tariffs on goods like engines and aircraft parts.
  • A 25 per cent levy on steel imports will remain in place.
  • The deal is seen as a coup for the prime minister, who resisted calls to retaliate against the US.

Sources:

  • Byline: Kate Devlin, The Guardian
  • Associated Press, "US President Donald Trump is presented with a letter from the King in February suggesting a first meeting and then a state visit," Copyright 2025 The Associated Press. All rights reserved.
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