UK, US reach quick trade deal to cut car and steel tariffs

May 2025 · London/Washington – The UK and the US reached a quick trade deal this week, focusing on reducing tariffs in the automotive and steel industries, marking a key step in the economic and trade cooperation between the two countries in the post-Brexit era.

According to the agreement, the US will reduce the import tariff on up to 100,000 British-made cars per year from the original 27.5% to 10%, providing great convenience for British automakers to enter the US market. At the same time, the US also abolished the 25% tariff on British steel and aluminum products, which is expected to release hundreds of millions of pounds of export potential for the British metal industry.

As a reciprocal measure, the UK also lowered the average tariff on US goods from 5.1% to 1.8%, and abolished tariffs on US-produced ethanol and beef. This adjustment has caused concerns in the UK’s domestic bioethanol industry, fearing that the massive influx of US products will hit domestic producers.

British Prime Minister Keir Starmer said in response: “Although we are disappointed with the US’s previous decision to impose tariffs, through continued dialogue and consultation, we have reached an agreement that is of substantial benefit to British industry.”

Analysts believe that this agreement paves the way for a comprehensive free trade agreement between the UK and the US in the future, but further negotiations are still needed in areas such as food standards and digital taxes.