The executive order will bring into effect a 10% tariff on UK car imports, down from the standard 25% tariff imposed earlier this year. This reduction follows extensive discussions aimed at protecting British industries from the ramifications of Trump's broad tariff strategy, amidst fears of economic strain on key sectors like automotive and steel.
Prime Minister Sir Keir Starmer heralded this development as a crucial milestone for UK-US relations during the G7 summit held in Canada, framing it as a demonstration of mutual support. However, whilst the deal lowers tariffs on autos, it maintains a 10% levy on a range of UK goods without addressing the pivotal issue of steel import tariffs – which Trump confirmed would be reviewed later.
Earlier this year, Trump's tariff hikes spurred widespread concerns from global markets, especially leaving British car manufacturers anxious about their export prospects to the US. Following the new order, the US is set to allow up to 100,000 UK cars under the new 10% tariff structure, a move expected to benefit UK manufacturers significantly compared to their European competitors, who still face higher tariffs.
Additionally, while steel and aluminum tariffs were not immediately lifted, the US administration indicated there would be discussions on a framework to potentially lower these taxes in the future. The ongoing requirement for steel to be "melted and poured" in its country of origin was a sticking point for UK steelmakers, which they hope the government will clarify soon.
The UK also agreed to a quota of 1.4 billion liters of US ethanol, previously subject to a 19% tariff, and announced the removal of a 20% tariff on certain US beef imports. However, the government has assured that UK food safety standards will remain uncompromised.
Despite commendations from some officials, the agreement has been categorized as less ambitious than a full free trade deal. Critics have characterized it as a "tiny tariff deal" and called for greater transparency regarding its long-term impacts on the British agricultural and manufacturing sectors.
As the UK and US move forward with this agreement, both nations seem committed to fostering stronger economic ties while navigating the complexities of international trade. The order is set to take effect within a week of its announcement, marking a significant step in the evolving trade relationship between the two countries.
Prime Minister Sir Keir Starmer heralded this development as a crucial milestone for UK-US relations during the G7 summit held in Canada, framing it as a demonstration of mutual support. However, whilst the deal lowers tariffs on autos, it maintains a 10% levy on a range of UK goods without addressing the pivotal issue of steel import tariffs – which Trump confirmed would be reviewed later.
Earlier this year, Trump's tariff hikes spurred widespread concerns from global markets, especially leaving British car manufacturers anxious about their export prospects to the US. Following the new order, the US is set to allow up to 100,000 UK cars under the new 10% tariff structure, a move expected to benefit UK manufacturers significantly compared to their European competitors, who still face higher tariffs.
Additionally, while steel and aluminum tariffs were not immediately lifted, the US administration indicated there would be discussions on a framework to potentially lower these taxes in the future. The ongoing requirement for steel to be "melted and poured" in its country of origin was a sticking point for UK steelmakers, which they hope the government will clarify soon.
The UK also agreed to a quota of 1.4 billion liters of US ethanol, previously subject to a 19% tariff, and announced the removal of a 20% tariff on certain US beef imports. However, the government has assured that UK food safety standards will remain uncompromised.
Despite commendations from some officials, the agreement has been categorized as less ambitious than a full free trade deal. Critics have characterized it as a "tiny tariff deal" and called for greater transparency regarding its long-term impacts on the British agricultural and manufacturing sectors.
As the UK and US move forward with this agreement, both nations seem committed to fostering stronger economic ties while navigating the complexities of international trade. The order is set to take effect within a week of its announcement, marking a significant step in the evolving trade relationship between the two countries.
