Trump Pushes Forward UK-US Pact with Bold Tariff Move

5 mins well spent

When big changes happen in global trade, it’s not just headlines—it’s real-life impact on businesses, jobs, and even the products we see in stores. One of the latest moves comes from former U.S. President Donald Trump, who signed an executive order to lower tariffs on UK car exports to the U.S. This decision is part of a broader, ongoing negotiation between the two nations, and while it’s not a full trade agreement, it’s definitely a step that matters.

Let’s break down what really happened, why it’s important, and what it could mean for the future of UK-US trade.

A Step Forward in UK-US Trade Relations

This recent executive order from Trump marks a significant shift in how the U.S. is treating goods coming from the UK—especially cars and aerospace products. The announcement came during the G7 summit, where UK Prime Minister Sir Keir Starmer described the moment as a “very important day” for both countries.

The core of the agreement? A reduced tariff of 10% on up to 100,000 UK-manufactured cars imported to the U.S. That’s a considerable improvement from the previous 25% tax, which had been causing real concern among UK automakers.

This decision follows weeks of back-and-forth negotiations designed to ease the burden on UK industries impacted by the earlier wave of U.S. tariffs. The car industry, in particular, had been feeling the pinch, as the U.S. remains a critical market for British-made vehicles.

But it’s not just about cars—some aerospace tariffs are being removed too. While the deal didn’t extend to steel (yet), it’s clear that progress is happening, even if in stages.

What’s in the Deal—and What’s Still Missing

Let’s get into the details of what was actually agreed upon—and what wasn’t.

What’s Included

• Tariff cuts for cars: Up to 100,000 UK cars can now enter the U.S. at a reduced tariff of 10%.

• Aerospace relief: Certain aerospace products will also see tariffs removed.

• Promise of future reductions: Both governments have expressed a desire to eventually cut steel tariffs as well.

What’s Not Included

• Steel and aluminium clarity: Despite discussions, there’s no confirmed change yet on tariffs for UK steel and aluminium. Trump kept things vague, stating that more info would come “in a little while.”

• Not a full trade deal: This is not a free trade agreement. It doesn’t offer the full range of benefits that a comprehensive trade pact would include, and it hasn’t been approved by Congress—which is required for a full deal in the U.S.

So while this move has been welcomed by both sides, it’s more like an opening act than the grand finale.

What This Means for UK Businesses and Consumers

For UK car manufacturers, this is a breath of fresh air. Companies can now resume shipping to one of their most important markets without being hit with the previously steep tariffs. This doesn’t just benefit the big car brands—it supports thousands of jobs and businesses connected to the automotive industry.

Mike Hawes, head of the Society of Motor Manufacturers and Traders, put it plainly: this agreement lets many manufacturers “resume deliveries imminently.” That’s not just good news for factories—it also means more stability and predictability for businesses that have been stuck in limbo.

More Confidence, More Opportunities

The announcement brings much-needed clarity and could open the door for more trade-friendly policies down the line. Businesses now have a clearer picture of how to move forward, and customers in the U.S. might see more UK cars available at better prices—thanks to the reduced costs involved in getting them across the Atlantic.

No Compromise on Standards

Another point the UK government was keen to stress: food and product standards aren’t going to be lowered. While there was some discussion around beef and ethanol quotas, officials confirmed that any imports from the U.S. will still have to meet the UK’s safety and quality requirements.

The Political Angle: More Than Just Economics

This agreement has a bit of a political flavor too. Trump praised Starmer for achieving what “others haven’t been able to do” in securing this tariff reduction deal. It’s a rare moment of bipartisan celebration in what’s typically a tough and slow-moving trade environment.

At the same time, critics in the UK have pointed out the deal’s limitations. Some are calling it “tiny” or “limited,” especially compared to the kind of comprehensive trade deal the UK had hoped to secure post-Brexit.

But for now, officials are treating this as a success. Business and Trade Secretary Jonathan Reynolds described it as a product of fast, effective cooperation between both governments—adding that further updates would come as more parts of the deal are implemented.

So, What’s Next?

This tariff adjustment is set to take effect one week after its official publication, which means businesses don’t have to wait long to benefit. As for what happens after that? It depends on how both sides move forward from here.

There’s clearly momentum and a desire to keep negotiating. If steel tariffs are eventually addressed and more sectors are brought into the fold, this could evolve into something bigger.

But it’s also clear that this is not the endgame. Without congressional approval, the current deal will remain a targeted tariff fix—not the comprehensive agreement that’s been on the UK’s wishlist for years.

The Bottom Line

This new US-UK agreement to ease car and aerospace tariffs is a welcome move for businesses and a step toward better trade relations. While it’s not the all-encompassing trade deal many were hoping for, it does bring immediate relief to manufacturers and sets the stage for future progress.

Think of it as a building block—something that makes life easier for businesses today while laying the groundwork for a stronger, more complete partnership tomorrow. Whether or not it becomes something bigger depends on political will, global events, and how both nations choose to shape their economic futures.

For now, UK businesses can breathe a little easier—and that’s no small thing.