Announced yesterday (May 8, 2025) by US president Donald Trump, the US-UK Economic Prosperity Deal (EPD) removes 25 per cent tariffs on steel and aluminium goods. Rates on UK car exports to the US have been cut from 27.5 per cent to 10 per cent.
The lower car rate applies to the first 100,000 vehicles exported from the UK to the US each year. Vehicles exported after the quota has been filled will be subject to 25 per cent rates.
The 10 per cent tariff announced by Trump on April 2 still applies to most other UK goods entering the US.
According to Downing Street, work will continue on the remaining sectors such as pharmaceuticals, as well as remaining reciprocal tariffs. However, the US has agreed that the UK will get preferential treatment in any further tariffs imposed as part of Section 232 investigations, which are conducted by the US Department of Commerce to determine if imports threaten US national security.
“This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel,” said PM Keir Starmer. “This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement.”
Commenting, Paul Kirkpatrick, partner and head of manufacturing and industrials at Browne Jacobson, said: “”Given the US is a key export market for steel, aluminium and cars, this is a further commitment from government following its British Steel intervention to creating a pro-business environment that not only helps to future-proof our manufacturing industry but can help to attract new inward investment.”
“Tariffs are damaging — no one wins in a trade war,” added Viki Bell, CEO of the Construction Equipment Association. “This deal sends a strong message about the value of open, rules-based trade, and we welcome the swift conclusion. Uncertainty is always damaging, and this move brings much-needed clarity for business.”
Bell continued: “What matters now is delivery. Our members will be looking for detail on how quickly the deal takes effect and how it supports the wider industrial base.”
