In a move aimed at easing tensions over trade, US President Donald Trump has signed off on a limited agreement with the United Kingdom that reduces tariffs on British car exports but leaves key issues such as steel and aluminium duties unresolved.
The agreement, described by UK Prime Minister Sir Keir Starmer as a “very important day” for both countries, allows up to 100,000 British-made cars to enter the US at a reduced 10% tariff down from the 25% imposed earlier this year. While this marks progress for UK automakers, the pact stops short of offering comprehensive relief across all affected industries.
Speaking at the G7 summit in Canada, Starmer welcomed the agreement but acknowledged the challenges that remain. The UK had hoped the pact would fully lift US tariffs on steel, which currently stand at 25%, but Trump offered little clarity. “We’re gonna let you have that information in a little while,” he said when pressed on the issue.
UK Trade Secretary Jonathan Reynolds confirmed the government is still working through “technical details” to resolve the steel impasse. Under current US rules, only steel “melted and poured” domestically qualifies for exemptions, complicating matters for UK firms that rely on imported steel amid ongoing furnace transitions.
The trade pact also removes levies on some aerospace products and outlines a future framework for adjusting quotas on US beef and ethanol imports into the UK. The beef agreement raises import quotas significantly from 1,000 to 13,000 tonnes but the UK government insists strict food safety standards will remain in place.
While ministers have championed the deal as a sign of stronger UK-US relations, critics argue it falls far short of a full trade agreement. Unlike a free trade deal, this pact does not require US Congressional approval, limiting its scope and long-term impact.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), welcomed the car tariff reduction as a “huge reassurance” for British automakers, who had faced severe disruption. “UK exports to the US were never a threat to US production,” he said, noting that only 100,000 vehicles were shipped to the US last year primarily high-value, low-volume cars.
Despite the progress, the broader uncertainty continues to weigh on sectors like steel. As the UK edges toward the July 9 deadline to avoid further tariff hikes, negotiations remain ongoing.
Erizia Rubyjeana
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