Effective since 30 June 2025, the agreement slashes export tariffs for British-made cars and aerospace goods entering the US market. Under the deal, UK car manufacturers can now export under a reduced 10% tariff quota – a significant drop from the previous 27.5%. Meanwhile, aerospace goods including aircraft engines and parts will benefit from a complete removal of the 10% tariffs previously imposed.

The Department for Business and Trade described the agreement as a major win for British industry, expected to save UK manufacturers hundreds of millions of pounds annually while protecting hundreds of thousands of jobs.

Prime Minister Keir Starmer hailed the deal as a turning point: “Our historic trade deal with the United States delivers for British businesses and protects UK jobs. From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy.”

Business and trade secretary Jonathan Reynolds echoed the sentiment, calling the agreement “a clear example” of the government’s “Plan for Change” in action.

“British car manufacturers can now export to the US at a significantly reduced 10% tariff rate – down from 27.5% – and aerospace goods will see 10% tariffs removed, saving sectors hundreds of millions each year and safeguarding thousands of jobs,” Reynolds said.

Industry leaders also welcomed the move. Kevin Craven, CEO of ADS, the trade association for aerospace, defence and security, said: “News that tariffs on aerospace goods are to be relaxed is welcome to the industry and regulatory bodies alike. More than 100,000 people are employed in highly skilled aerospace jobs across the UK, and this development supports continued investment in innovation and excellence.”

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), described the agreement as “a diplomatic coup.”

He said: “It immediately slashes the punitive tariffs that brought the US export market to a standstill and threatened the viability of some of the most famous names in British manufacturing. UK companies can now look to the future with more optimism.”

The UK is currently the only country to have secured this type of deal with the US, further distinguishing its approach to trade following Brexit. In addition, the UK continues to enjoy exemptions from the global 50% tariffs on steel and aluminium, and the government is reportedly working with the US on further reductions in this area.

The deal is part of a broader push by the UK government to strike strategic international trade agreements, with recent deals signed with India and the EU expected to inject billions into the UK economy over the coming years.

As implementation begins, Parliament will also be updated on related commitments, including quota adjustments on US beef and ethanol imports.

For Britain’s manufacturers, today marks a pivotal moment in opening new markets, reducing export costs, and reinforcing the UK’s reputation as a global leader in high-value industrial sectors.

Source: UK-US trade deal kicks into gear: immediate tariff cuts for UK auto and aerospace sectors - GOV.UK