Starmer said: “This is a really fantastic, historic day – a real tribute to the history we have of working together. This [deal] is going to boost trade.”
In response to the news, Society of Motor Manufacturers and Traders boss Mike Hawes said: “The agreement to reduce tariffs on UK car exports into the US is great news for the industry and consumers.
“The application of these tariffs was a severe and immediate threat to UK automotive exporters, so this deal will provide much needed relief, allowing both the industry and those that work in it to approach the future more positively.”
The news marks a major step down from Trump’s announcement in March, when he signed a bill that penalised all car makers importing cars into the US market.
At the time, Trump said the decision was made because of the imbalance of American-made car sales in other markets and claimed the move would lead to “tremendous growth” for the US automotive industry.
Around eight million cars were imported into the US last year, approximately half the total sold in the market. Most were from Mexico, Canada, Germany and Japan.
The news will offer relief to the UK’s car makers, especially JLR (Jaguar Land Rover), which counts the US as its biggest market, having sent 130,000 cars there in 2024. It last month paused shipments to the US as it worked to “address the new trading terms”.
Speaking today, JLR CEO Adrian Mardell said: “The car industry is vital to the UK’s economic prosperity, sustaining 250,000 jobs. We warmly welcome this deal which brings greater certainty for our sector and the communities it supports.
“We would like to thank the UK and US governments for agreeing this deal at pace and look forward to continued engagement over the coming months.”
Mini will also welcome the news, given that the Mini Cooper hatchback, which has nearly doubled its US sales so far this year, is made at Oxford.
However, the Countryman SUV, made bigger in its most recent generation as part of a US market push, is made in Germany, which remains subject to the 25% tariff.
Tariff negotiations between the EU (of which Germany is a member) and the US remain ongoing.