Business reporter
President Donald Trump has signed an executive order to reduce tariffs on UK cars being shipped to the US, which will bring into force parts of a tariff deal agreed between the two countries last month.
Speaking at the G7 summit in Canada, Prime Minister Sir Keir Starmer called the move a “very important day” for both countries.
It comes after weeks of talks to implement parts of the pact, which the UK government hopes will shield British businesses from the impact of Trump’s tariffs.
But the deal includes a 10% levy on most UK goods, including cars, and did not address the expected removal of charges on steel imports.
The pact, initially agreed last month, is the first that the White House has announced since it imposed wide-ranging tariffs on various goods entering America earlier this year.
It was signed shortly before the White House said Trump would leave the summit early due to the situation in the Middle East.
Trump has raised taxes on goods entering the US, in a series of rapid-fire announcements in an attempt to encourage businesses and consumers to buy more American-made goods.
The moves had sparked financial turmoil and alarm around the world, including in the UK, where car manufacturers and steelmakers rely on the US as a key destination for exports.
Tariffs cut for cars but remain for steel
In the order Trump signed on Monday, the US said it would allow up to 100,000 cars into the US at a 10% tariff, instead of the 25% import tax imposed on all car imports earlier this year, as agreed under the terms outlined in May.
The order said the US would set up a similar system for steel and aluminium, but did not specify what it would be.
“We’re gonna let you have that information in little while,” the US President said when asked if steel tariffs would be axed for the UK – a major part of the original tariff pact.
The UK government said it would “continue to go further and make progress towards 0% tariffs on core steel products as agreed”.
The order also agreed to remove tariffs on certain kinds of aerospace products.
Sir Keir said the deal “implements on car tariffs and aerospace”, and described the agreement as a “sign of strength” between Britain and America.
In response to a question about future tariffs, Trump said the UK was “very well protected”. “You know why? Because I like them,” he added.
The deal on US-UK tariffs will come into effect seven days following its official publication.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, which represents UK carmakers, said the signed agreement would enable “many manufacturers to resume deliveries imminently”.
“We wait to see the full details of the deal and how it will be administered but this will be a huge reassurance to those that work in the sector and bolster the confidence of our important US customers,” he added.
Getty ImagesBusiness and Trade Secretary Jonathan Reynolds said the announcement was “the result of work happening at pace between both governments to lower the burden on UK businesses”.
“We will update parliament on the implementation of quotas on US beef and ethanol, part of our commitment to the US under this deal,” he added.
US beef exports to the UK have historically been subject to a 20% tariff within a quota of 1,000 metric tons. The UK had agreed to scrap this tariff and raise the quota to 13,000 metric tonnes, according to terms shared last month.
But the UK government has insisted there will be no weakening of food standards and that any US beef imports will need to meet food safety requirements.
Not a free-trade deal
Ministers have hailed the US deal alongside trade deals with the European Union and India.
But the US agreement is much more limited than the full-fat trade deal that has long been discussed on Downing Street. The scope of what was signed on Monday also appeared more restricted than the general terms of the deal as outlined last month.
Trump has previously declared the pact on tariffs is a “major trade deal”, but it is not. The US president does not have the authority to sign free-trade agreements without the approval of Congress.
Trump said Sir Keir had done “what other people… haven’t been able to do” in securing such a deal with the US.
“He’s done what other people – they’ve been talking about this deal for six years… and he’s done what they haven’t been able to do.”
The pact has drawn criticism by opposition parties in the UK. Conservative party leader Kemi Badenoch has called it a “tiny tariff deal”.
