UK and US Reach Historic Trade Deal on Tariffs for Automotive and Aerospace Sectors

Strategic Insights -

The deal, announced by British Prime Minister Sir Keir Starmer, reduces tariffs on automotive and aerospace exports to the US, a key development in the post-Brexit trade landscape. The agreement slashes import taxes for car manufacturers, allowing them to export to the US at a lower rate of 10%, down from 27.5%. Meanwhile, the aerospace sector will no longer face any tariffs.

Key Takeaways:

  • The UK and US have agreed to reduce tariffs on automotive exports from 27.5% to 10% for car manufacturers exporting to the US.
  • The aerospace sector will see a 10% tariff removed entirely, providing relief to industry players.
  • The Prime Minister hailed the deal as a "historic trade deal" that delivers for British businesses and protects UK jobs.
  • The agreement has been welcomed by industry leaders, with Kevin Craven, head of aerospace trade association ADS, expressing gratitude for the efforts to reach a deal.
  • The Society of Motor Manufacturers and Traders chief executive, Mike Hawes, described the agreement as "good news for US customers and a huge relief for the UK automotive companies that export to this critically important market".
  • The deal also Includes an agreement to remove a 20% tariff on US beef imports to the UK and increase the quota for US beef to 13,000 metric tonnes.
  • A 19% tariff on ethanol imports from the US is set to be removed, with a tariff-free quota of 1.4 billion litres of US ethanol applied.

Statistics:

  • 10% tariff quota for car manufacturers exporting to the US
  • 27.5% tariff rate previously applied to automotive exports
  • 0% tariff rate for the aerospace sector
  • 20% tariff on US beef imports to the UK previously applied, now removed
  • 13,000 metric tonnes quota for US beef imports to the UK
  • 1.4 billion litres tariff-free quota for US ethanol imports
  • £Hundreds of millions per year expected to be saved by the automotive and aerospace industries

Sources:

  • The UK Government ( Sir Keir Starmer and Jonathan Reynolds)
  • Société de l'Automobile du Monde (Mike Hawes)
  • ADS (Aerospace, Defence and Security) (Kevin Craven)