For the first time, the US has committed to reducing tariffs on UK aerospace goods such as engines and similar aircraft parts from the general 10% tariff being applied to all other countries, which is expected to come into force by the end of the month.
This deal is seen as a huge win for the UK’s aerospace sector currently facing additional 10% tariffs, helping make companies such as Rolls Royce more competitive and allowing them to continue to be at the cutting edge of innovation.
British car manufacturers can also breathe a sigh of relief as they will be able to export to the US at a 10% tariff rate as part of the recently agreed landmark UK-US trade deal by the end of the month.
The UK is the only country to have secured this agreement with the US which reduces car export tariffs from 27.5%, saves car manufacturers hundreds of millions a year, and protects tens of thousands of jobs, delivering on the Plan for Change.
Business and Trade Secretary, Jonathan Reynolds said: “We agreed this deal with the US to ensure jobs and livelihoods in some of our most vital sectors were protected, and since then we have been focused on delivering those benefits to businesses.
“Bringing trade deals into force can take several months, yet we are delivering on the first set of agreements in a matter of weeks. And we won’t stop there.
“As part of our Plan for Change, this government is doing all it can to reduce the pressures on businesses by lowering costs, speeding up delivery times and helping them to navigate in a time of global uncertainty.”
Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes said: “This is great news for the UK automotive industry, helping the sector avoid the severest level of tariffs and enabling many manufacturers to resume deliveries imminently.
“We wait to see the full details of the deal and how it will be administered but this will be a huge reassurance to those that work in the sector and bolster the confidence of our important US customers.
“The fact the UK has secured a deal, ahead of many competitors, and which makes automotive a priority, should be recognised as a significant achievement.”
Thanks to the UK-US deal, the UK is the only country to be exempt from the global tariff of 50% on steel and aluminium. As the Prime Minister and President Trump have again confirmed, progress will continue towards 0% tariffs on core steel products as agreed.
This deal is one of many international agreements this government has secured recently to boost the economy, including a trade deal with India which will add £4.8 billion to the UK economy and £2.2 billion in wages every year and a renewed EU deal which will add nearly £9 billion to the UK economy by 2040 on SPS and emissions measures alone.
