British manufacturers have welcomed some tariff relief in the new US-UK trade deal, with the share prices of the sportscar brand Aston Martin Lagonda and jet engine maker Rolls-Royce rising.
The US has agreed to cut tariffs on cars, jet engines and steel, although the 10% baseline levy will continue to apply to other products exported from the UK, the two governments announced on Thursday.
Keir Starmer spoke to Donald Trump from the headquarters of JLR, the UK’s biggest automotive employer and one of the main exporters to the US.
The US now has a quota of 100,000 British-made cars per year with a 10% tariff – significantly lower than the 27.5% rate Trump imposed in March, but more than the 2.5% before he took office. The UK exported about 102,000 cars to the US in 2024, according to the Society of Motor Manufacturers and Traders.
Mike Hawes, the society’s chief executive, said the tariff cut on UK car exports was “great news for the industry and consumers”. He had previously said there would be job cuts “within weeks” at the luxury and premium carmakers that rely on wealthy American 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,” he said. However, he added that the UK should work on a deeper deal to cut trade barriers further.
The deal also purported to remove a 25% tariff on British steel exports, which the leading body for the industry said would allow trade to resume. UK Steel’s director general, Gareth Stace, called the announcement a “major relief to the UK steel sector”. However, the group added there were still questions over whether steel derivative products would still be subject to tariffs.
A senior steel industry executive said the deal was “clearly very positive”, despite some concerns over the details yet to be announced. The executive added that being the first to reach a deal would give the UK an advantage over rivals. Another source said they expected further “strings attached”, including restrictions on using Chinese material.
Trump said Rolls-Royce engines, used on Boeing 787 passenger jets, would be exempted from tariffs. The share price of Rolls-Royce rose above £8 before dropping back to £7.94, a 3.7% increase for the day.
Boeing’s share price also rose by 4% after the US commerce secretary, Howard Lutnick, told a press conference that an unnamed UK company would purchase Boeing planes worth $10bn (£7.5bn).
Yet others were left empty-handed. The rest of the aerospace industry was left with little clarity on whether tariffs on aerospace parts would remain at 10%. One industry insider said there was “cautious optimism” that these tariffs would fall back to the 0% level in place before April. The White House said US companies would get “preferential access” to British parts.
Whisky, which accounts for about 2% of UK goods exports to the US, will still attract 10% tariffs. A spokesperson for the Scotch Whisky Association said it still hoped for a “return to the zero-for-zero tariff agreement with our friends and partners in the US whiskey industry as soon as possible”.
The UK government also drew a rebuke from the beer industry, after appearing to suggest reducing tariffs on US ethanol would cut the cost of a pint because ethanol was “used to produce beer”.
Ethanol is produced during the brewing process but is not among the ingredients used in beer-making. The Department for Business and Trade later removed the claim from a press release.
A spokesperson for the British Beer and Pubs Association said: “We are urgently seeking clarity about the details of the deal as, given ethanol is not used to make beer, we cannot see how this is a win for brewers or pubs.”
Stephen Phipson, the chief executive of Make UK, said the UK now needed to work on the comprehensive industrial strategy that business leaders have been calling for since Labour got elected.
