Posted on 18 Jun 2025
The United States and the United Kingdom have formalized key elements of a new trade agreement centered on tariff reductions for automobiles and aerospace products, while negotiations over steel and aluminum duties remain ongoing, Mysteel Global learned.
Under the deal signed by U.S. President Donald Trump and U.K. Prime Minister Keir Starmer on the sidelines of the G7 summit in Canada on June 16, the U.S. will lower import duties on British cars from 25% to 10% for the first 100,000 vehicles annually.
The move marks a significant boost for the U.K.'s embattled automotive sector, which has faced increasing pressure due to falling exports and high tariffs under earlier trade measures. British carmakers are expected to resume deliveries to the U.S. imminently, according to industry representatives.
The agreement also eliminates tariffs on U.K. aerospace goods, including aircraft engines and parts, further strengthening bilateral supply chains in a sector both countries view as strategically vital. The U.S. committed to excluding these goods from any new tariffs tied to national security reviews.
However, the long-anticipated removal of U.S. tariffs on British steel and aluminum exports did not materialize in the final document. These products remain subject to the existing 25% duty, despite earlier signals from both leaders that they intended to phase them out. Instead, Washington outlined plans to establish a tariff-rate quota system, contingent on the U.K. meeting strict criteria related to supply chain security and domestic production standards.
U.K. Trade Secretary Jonathan Reynolds acknowledged that progress on steel remains limited but confirmed that negotiations are ongoing.
While incomplete, the deal offers immediate relief to critical U.K. industries and represents the first major bilateral tariff reduction the Trump administration has enacted since launching a wave of protectionist policies earlier this year. Both governments have pledged to pursue further negotiations, with pharmaceuticals and food standards among the areas under discussion.
Last month, China's Ministry of Foreign Affairs spokesperson Lin Jian, when asked about the matter at a press conference, stated: "Regarding the trade agreement the UK has reached with the relevant country, I would like to point out that cooperation between countries should not target or undermine the interests of third parties."
Source:Mysteel Global
