WASHINGTON — President Donald Trump has signed an executive order reducing import duties on UK-manufactured cars, putting parts of a new US-UK tariff agreement into effect. The order allows up to 100,000 British cars into the U.S. market at a 10% tariff, down from the 25% rate imposed earlier this year.
The move follows an agreement reached last month between Washington and London. Trump confirmed the order shortly before leaving the G7 summit in Canada on Monday.
“This is a big win for the UK,” Trump said. “They’re very well protected. You know why? Because I like them.”
British Prime Minister Sir Keir Starmer, also speaking at the summit, welcomed the signing. “This is a very important day for both countries,” he said. “This agreement is a sign of strength in our relationship with the United States.”
Steel Still Under Tariff Pressure
While the car tariff cut is now formal, the order left out key details on steel and aluminum duties. The White House confirmed it is working on a system for those sectors but did not give a timeline or specifics.
“We’re gonna let you have that information in a little while,” Trump told reporters when pressed on steel tariffs, a major point in earlier talks.
The UK government said it remains committed to pushing for 0% tariffs on its core steel products. Current steel exports to the U.S. still face high charges, which industry leaders argue threatens jobs and production.
Not a Full Trade Deal
Despite the White House describing the move as a “major trade deal,” the agreement is limited in scope. It does not qualify as a full free-trade agreement, which would require Congressional approval.
The order also eliminates some tariffs on aerospace parts, benefiting sectors with longstanding ties between UK and US manufacturers.
However, opposition voices in the UK have pushed back. Kemi Badenoch, leader of the Conservative Party, called the deal a “tiny tariff arrangement” that falls short of the broader trade deal previously promised.
Car Industry Reaction
UK carmakers have responded with cautious optimism. Mike Hawes, head of the Society of Motor Manufacturers and Traders, said the reduced tariff was a “huge reassurance” after months of uncertainty.
“Our exports to the U.S. were never a threat to American manufacturing,” Hawes said. “We’re talking about small volume, high-value vehicles. Last year, we only sent 100,000 units.”
If the tariff deal had fallen through, British cars would have faced a 27.5% duty on arrival in the U.S. a combination of the original 2.5% rate and the 25% hike imposed in early 2025.
Hawes noted the 10% rate now offers UK manufacturers a pricing edge over European competitors still paying higher duties. “Manufacturers from Italy and Germany are still under the 27.5% tariff,” he said. “That makes a difference.”
Background and Beef Quotas
Trade and Business Secretary Jonathan Reynolds confirmed the deal includes broader concessions. He said Parliament will soon receive updates on U.S. beef and ethanol quotas, which form part of the same agreement.
The UK will raise its U.S. beef quota to 13,000 metric tons and remove a 20% tariff on these imports. Still, the government insisted no changes will be made to food safety standards.
“This is the result of hard work between both governments to lower costs for UK businesses,” Reynolds said.
Looking Ahead
While hailed by both governments as a step forward, the order does not fully resolve ongoing trade tensions. Sectors such as steel remain uncertain, and wider negotiations are still on the table.
Trump credited Starmer for breaking the deadlock. “They’ve been talking about this deal for six years,” he said. “He’s done what others couldn’t.”
The partial agreement takes effect seven days after its official publication.
