Levy applies to first 100,000 cars exported to the US from UK; reduced from a previously announced 25% tariff
UK-made vehicles imported into the US will be hit with a reduced tariff of 10%, president Donald Trump has announced, but only for the first 100,000 cars exported.
It follows more than a month of negotiations between UK ministers and US officials after president Trump revealed sweeping levies on foreign-made products. This included a 25% tariff on new cars imported into the US. All levies were due to start on 1 April, but a 90-day reprieve was given so negotiations could take place.
Details on the new deal are currently sparse, but the US confirmed that the 10% tariff – which brings it in line with the levy on other foreign goods – will apply to “100,000 cars”. This suggest anything over that number would be hit by the higher 25% figure. Previously, before Trump’s March announcement, the tariff was 2.5%.
However, Starmer did confirm that “we have scope now to increase that quota – this is not final”.
Last year the UK sent some 102,000 cars to the US market. The US is the British car industry’s second largest export market, behind the EU, with 27% of all UK-made vehicles sent to the market in 2024, accounting for some £9bn a year.
On the new tariff, Starmer added: “That is a huge and important reduction.”
No details were given on the proposed 25% tariff on car parts – which was due to begin in the coming months.
While details have yet to be fully confirmed, it is said also confirm new deals on food, chemicals, machinery and industry. Tariffs on steel and aluminum have been reduced to 0%.
The UK is the first nation/market to reach an agreement with the US following president Trump’s tariff announcement in March. China is said to be the next, said the US.
Announcing the deal from the White House’s Oval Office, president Trump said: “I’m thrilled to announce a breakthrough trade deal. The agreement with one our closest and most cherished allies.
“Final details are being written up and will be detailed in the coming weeks.”
Without detailing, he added that the deal gets rid of many US to UK tariffs that “unfairly discriminated” against US. “They are opening up their country. Their current is a little closed,” said Trump.
Starmer added: “This is a really fantastic historic day. A real tribute to the history we have of working together. This [deal] is going to boost trade.”
In response to the news, Society of Motor Manufacturers and Traders boss Mike Hawes said: “The agreement to reduce tariffs on UK car exports into the US is great news for the industry and consumers.
“The application of these tariffs was a severe and immediate threat to UK automotive exporters so this deal will provide much needed relief, allowing both the industry, and those that work in it, to approach the future more positively.”
Thursday’s news marks a major step down from president Trump’s end of March announcement, where he signed a bill that penalised all car makers that import cars into the American market.
At the time, Trump said the decision was made because of the imbalance of American-made car sales in other markets, and claimed the move would lead to “tremendous growth” for the US automotive industry. Around eight million cars were imported into the US last year, approximately half the total sold in the market, most were from Mexico, Canada Germany and Japan.
The news will offer relief to the UK’s car makers, especially JLR (Jagaur Land Rover) – which counts the US as its biggest market sending 130,000 cars there in 2024 – after it last month paused shipments to the US as it worked to “address the new trading terms”.
The likes of Mini, too, will welcome the news, given the Mini Cooper – a car which has recorded a near-doubling in US sales so far this year – is produced at its Oxford plant. However the larger Countryman, made bigger in its most recent generation as part of a US market push, is made in Germany where the 25% tariffs remain.
Tariff negotiations between the EU and US are still ongoing.
This is a breaking news story. More to follow.
Source: Autocar
