UK-US trade deal kicks into gear: immediate tariff cuts for UK auto and aerospace sectors
The UK-US trade deal has today come into force, slashing US export tariffs for the UK's automotive and aerospace sectors.
- Immediate benefits for UK auto and aerospace sectors as tariffs are slashed under the UK-US trade deal, protecting British jobs across the country.
- UK car manufacturers can now export to the US under a reduced 10% tariff quota saving hundreds of millions annually and supporting hundreds of thousands of jobs.
- The UK aerospace sector also gains a major boost, with 10% tariffs on goods like engines and aircraft parts removed today and a commitment to maintain them at 0%.
From today, British car and aerospace manufacturers will benefit from major tariff reductions when exporting to the US, saving thousands of jobs, as the landmark UK-US trade deal comes into effect.
The UK is the only country to have secured this deal with the US, reducing car export tariffs from 27.5% to 10%, saving manufacturers hundreds of millions each year and protecting hundreds of thousands of jobs.
At the same time, the aerospace sector has seen the removal of 10% tariffs on goods such as engines and aircraft parts, helping make companies such as Rolls Royce more competitive and allow them to continue to be at the cutting edge of innovation.
These changes are a huge win for both sectors and will help ensure UK manufacturers remain globally competitive, protect British jobs and continue to lead in innovation and excellence.
Prime Minister Keir Starmer said:
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.
We will always act in the national interest - backing British businesses and workers, delivering on our Plan for Change.
Business and Trade Secretary Jonathan Reynolds said:
We agreed this deal with the US to protect jobs and support growth in some of our most vital sectors - and today, we’re delivering on that promise for the UK’s world-class automotive and aerospace industries.
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.
This is a clear example of our Plan for Change in action: cutting costs for businesses, speeding up delivery of trade benefits, and helping UK industries thrive in a challenging global environment.
Kevin Craven, CEO of ADS said:
News that tariffs on aerospace goods are to be relaxed is welcome to the industry and regulatory bodies alike.
The UK’s aerospace sector is renowned for its innovation and excellence, and thanks to our role in the global supply chain, more than 100,000 people are employed in highly skilled jobs in the sector throughout the country.
Efforts to reach this outcome are hugely appreciated by a sector that has remained resilient against a multitude of external pressures.
Mike Hawes, Chief Executive of SMMT said:
The implementation of the new trading agreement between the UK and US is good news for US customers and a huge relief for the UK automotive companies that export to this critically important market.
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.
Securing the deal – the first and, so far, only automotive deal in place with the administration – is a diplomatic coup and provides a foundation on which to grow trade in the future. Combined with the new Industrial and Trade Strategies that have automotive at their heart, UK companies can look to the future with more optimism.
We have worked with the US and all parts of UK industry to build a quota system which is as simple, fair and effective as possible.
Thanks to the UK-US deal, the UK is the only country to be exempt from the global tariff of 50% on steel and aluminium. As the Prime Minister and President Trump have again confirmed, we will continue go further and make progress towards 0% tariffs on core steel products as agreed.
Today’s announcement demonstrates the kind of agile, sector-specific agreement outlined in the UK’s Trade Strategy — designed to deliver rapid, practical benefits for British businesses and workers in key industries.
This deal is one of many international agreements this government has secured recently to boost our economy, including a trade deal with India which will add £4.8 billion to the UK economy and £2.2 billion in wages every year, and a renewed EU deal which will add nearly £9 billion to the UK economy by 2040 on SPS and emissions measures alone.
Today’s announcement is the result of work happening at pace between both governments to lower the burden on UK businesses, especially the sectors most impacted by the tariffs. We will now update Parliament on the implementation of quotas on US beef and ethanol, as part of our commitment to the US under this deal.
Background:
- The updated federal notice from the US Government confirming the change regarding UK auto and aerospace tariffs is available here: https://www.federalregister.gov/documents/2025/06/30/2025-12060/imports-of-automobiles-automobile-parts-civil-aircraft-and-civil-aircraft-parts-from-the-united.