President Donald Trump has signed an executive order reducing tariffs on UK-made cars exported to the United States, implementing parts of a UK-US tariff pact agreed last month. While the move has been welcomed by industry leaders and the UK government, it stops short of being a full free-trade deal and leaves key sectors like steel exposed.
Speaking at the G7 summit in Canada, UK Prime Minister Sir Keir Starmer hailed the development as a “very important day” for both nations. Under the order, up to 100,000 UK cars will now face a 10% tariff instead of the previously imposed 25%. This comes after weeks of negotiations aimed at shielding British industries from US-imposed tariffs introduced earlier this year.
However, tariffs on UK steel and aluminium remain in place. Trump declined to provide a timeline on their removal, stating only that further details would be released later. The UK government insists it is pushing toward 0% tariffs on core steel products.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, described the car tariff relief as a “huge reassurance.” He noted that UK car exports to the US amounting to around 100,000 vehicles last year are high-value but low-volume, posing little threat to US automakers.
Despite the breakthrough, the pact does not constitute a comprehensive free-trade agreement. Trump lacks authority to enact such deals without congressional approval. Business Secretary Jonathan Reynolds emphasized that while the agreement is limited, it demonstrates progress, especially in reducing burdens on UK exporters.
The UK has also agreed to expand quotas and reduce tariffs on certain US agricultural imports, such as beef and ethanol, while reaffirming its commitment to uphold food safety standards.
Though Trump labeled the pact a “major trade deal,” critics in the UK, including Conservative leader Kemi Badenoch, dismissed it as a “tiny tariff deal.” Nonetheless, Starmer has been credited with achieving a breakthrough where previous UK administrations struggled.
