UK and US slash car and aerospace tariffs, saving UK firms millions and protecting key manufacturing jobs
The UK and the United States have reached a major trade agreement that significantly reduces tariffs on British vehicle exports and aerospace components. This new deal aims to bolster the UK’s manufacturing sector and secure thousands of jobs.
Prime Minister Sir Keir Starmer confirmed that UK-made vehicles exported to the U.S. will now face a 10% import tariff, down from the previous 27.5%, following talks with President Donald Trump. The revised tariffs are part of a newly established quota of 100,000 vehicles per year. Exports exceeding this quota will still be subject to the original 27.5% rate. Starmer added that the 100,000-vehicle cap is not fixed and could be subject to future renegotiation.
The agreement was finalized after President Trump signed an order on June 16, 2025, confirming the terms of a temporary deal made in May. It has been widely welcomed by industry leaders as a unique and important step forward.
Jaguar Land Rover (JLR), where Starmer took the phone call with President Trump, endorsed the deal. JLR CEO Adrian Mardell praised the agreement as “warmly welcomed,” noting the UK automotive sector supports around 250,000 jobs. “We would like to thank the UK and U.S. Governments for agreeing to this deal at pace and look forward to continued engagement,” he said.
The Society of Motor Manufacturers and Traders (SMMT) also hailed the deal as a ‘huge relief’ for the sector. Its CEO, Mike Hawes, emphasized the importance of predictable trade conditions for the automotive industry.
Aston Martin Lagonda CEO Adrian Hallmark, speaking at the International Automotive Summit, revealed that the brand had paused U.S. shipments between April and June due to the high tariffs. He now expects a surge in sales, saying the company plans to invoice three months’ worth of orders in just one day.
Labor estimates that the new arrangement will save UK manufacturers hundreds of millions of pounds annually while protecting thousands of jobs in critical sectors.
The deal also extends beyond the automotive industry. A 10% tariff on aerospace components, including engines and aircraft parts, has been lifted, providing a boost to manufacturers such as Rolls-Royce. The aerospace giant recently announced deals for 142 aircraft engines globally, underscoring the potential gains from reduced trade barriers.
Prime Minister Starmer described the agreement as a win for British industry: “From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy. We will always act in the national interest—backing British businesses and workers, delivering on our Plan for Change.”
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