UK Trade Deal Removes Tariffs on Aerospace Parts, Drops Car Tariff, Leaves 10%
A U.S.-U.K. trade deal announced in the Oval Office leaves the average tariff on U.K. goods at 10%; however, aerospace engines and parts will enter duty-free.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Last year, the U.K. exported more than $2 billion worth of aircraft parts and engines to the U.S., according to the Observatory of Economic Complexity.
President Donald Trump said the U.S. will lower the 25% tariff on imported cars to 10% for the first 100,000 British cars that are imported annually.
In 2024, the U.K. exported 102,000 cars to the U.S., about 17% of all its auto exports, according to the British government. Its car exports were valued at $12 billion in 2024, and cars are the country's the No. 1 goods export to the U.S.
No date for the tariff decreases was mentioned in either government's fact sheet.
The British government said its country's steel will face no duty in the U.S., rather than 25% tariffs. Neither government said whether derivatives also would receive the carve-out; derivative items are a higher volume export than raw metals.
The British government said that it will offer a tariff rate quota of 13,000 metric tons of U.S. beef, with that amount facing no duty, but it will maintain its food standards, which include a ban on hormone-treated beef.
Reporting on the U.K.-U.S. trade talks during the first Trump administration said that U.K. food standards were a sticking point preventing an agreement.
"This deal just fell into place," Trump said. "One of the reasons it did is because we blew up the whole system."
When a reporter at the press conference asked if the U.K. had agreed to take hormone-treated beef or chlorinated chicken, U.S. Trade Representative Jamieson Greer said: "It’s very clear that we are going to discuss all these types of issues." Greer said that while every country will have its own sanitary and phytosanitary rules that must be followed, "our point is that the rules need to make sure that they are based on science and that's our expectation. We know the U.K. believes that, too."
Trump suggested that under Robert F. Kennedy Jr.'s leadership, the U.S. cattle industry may reduce its use of growth hormones. "I think we’re heading that way, it seems to me," he said, referring to Kennedy's push to reduce chemical additives in foods.
The U.K. government also agreed to drop its tariff on ethanol from 19% to zero.
A reporter asked what the U.K. would need to do to return to most-favored nation treatment, and end the 10% "reciprocal" tariff.
Trump said the 10% rate "is probably the lowest" he will offer to any country subject to reciprocal tariffs, even those with balanced goods trade, like the U.K.
However, he said getting to stay at 10% rather than going to higher threatened rates won't be the template for future deals. "Some will be much higher, because they have massive trade surpluses, and they didn’t treat us right," he said.
He added that it will be rare for other car-exporting countries to get a tariff reduction from 25% to 10% on cars.
He said the U.K. has super-luxury cars like Rolls-Royces, Bentleys and Jaguars, and those are "very special" cars. Where companies make millions of cars annually, he said, that's different, and he's pushing those companies to assemble their cars in the U.S.
"I won’t do that deal with cars, unless somebody shows a car similar to a Rolls-Royce," he said.
The British government said, "Work will continue on the remaining sectors -- such as pharmaceuticals and remaining reciprocal tariffs. But -- in an important move -- the US has agreed that the UK will get preferential treatment in any further tariffs imposed as part of Section 232 investigations."
Medicines and vaccines are among the top exports from the U.K. to the U.S.
A British reporter asked about the 100% tariff on film production abroad, and Trump said, "We’re going to have a discussion on that separately. We’re going to be doing some tariffs" in the film sector.
The U.K. said it has not removed its digital services tax, which hits American service exports.
In a social media post, Trump said that before he entered office, U.K. exports faced an average 3.4% tariff, and now they will face 10%. He said before this deal, U.S. exports faced an average 5.1% tariff, and now they will face a 1.8% tariff.
The post projected $5 billion more in U.S. goods exports as a result of lower trade barriers, and $6 billion in annual tariff revenue on U.K. imports.
Trump called the deal "maxed out," and rejected a question from a reporter that asked if he was overstating the significance of the agreement. But, like Prime Minister Keir Starmer, who made remarks on a speaker phone during the press conference, he said the deal will evolve. "Over time, there’ll be changes made, there’ll be adjustments made, because we’re flexible," he said.
House Ways and Means Trade Subcommittee ranking member Linda T. Sánchez, D-Calif., issued a statement that said: "This is a lazy attempt at a trade agreement. President Trump is desperate to claim a win, hoping it will deflect from the rising costs and economic pain caused by his reckless trade policies."