Thousands of jobs have potentially been saved as the Prime Minister secured a first-of-a-kind trade agreement with the US.
This “historic” agreement with the US to slash tariffs delivers for UK carmakers, steelworks and farmers – protecting jobs and providing stability for exporters.
Car export tariffs will reduce from 27.5 percent to 10 percent, saving hundreds of millions a year for Jaguar Land Rover alone. This will apply to a quota of 100,000 UK cars, almost the total the UK exported last year.
The Prime Minister visited Jaguar Land Rover last month, announcing greater freedom for car manufacturers to back British industry in the face of global headwinds. During this visit, he told workers he would accelerate trade deals to protect their jobs, their livelihoods, and to champion British business worldwide.
The UK steel industry – which was on the brink of collapse just weeks ago – will no longer face
tariffs, thanks to the new deal.
The Prime Minister negotiated the 25 percent tariff down to zero, meaning UK steelmakers can carry on exporting to the US. This follows last month’s intervention from the Government to take control of British Steel to save thousands of jobs in Scunthorpe.
The two nations have agreed on new reciprocal market access on beef – with UK farmers given a quota for 13,000 metric tonnes. There will be no weakening of UK food standards on imports, the Government claims.
The UK will also remove the tariff on ethanol, which is widely used in the manufacturing sector – coming into the UK from the US, down to zero.
It is one of many international deals that the Government is landing to boost our economy, following an Indian trade deal, which it claims will add £4.8 billion to the UK economy and £2.2 billion in wages every year.
Business and Trade Secretary Jonathan Reynolds said: “I am delighted our calm approach and proactive engagement with the US has resulted in this deal, which cuts tariffs for UK industry and cuts costs for businesses.
“Businesses across the country will be glad to see our approach working, but this is only the beginning.
“We look forward to strengthening our trading relationship with the US through a wider economic deal, which will help us to deliver on our Plan for Change to provide economic stability and make this country fit for the future.”
Work will continue on the remaining sectors, such as pharmaceuticals and 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.
The deal opens the way to a future UK-US technology partnership through which the two nations will collaborate in key areas of advanced technology,
for example, biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.
The Digital Services Tax remains unchanged as part of today’s deal. Instead, the two nations have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US – opening the UK up to a huge market that will put rocket boosters on the UK economy.
Industry reaction
Mike Hawes, SMMT Chief Executive, said: “The agreement announced 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.”
Andrei Danescu, CEO of Dexory, said: “The US/UK trade deal is a welcome headline – with tariff
relief for vital exports and progress on digital services taxes, it’s a step forward for transatlantic trade. But sadly, headlines don’t build resilience!
“What’s needed now is not a patch, but a full rethinking of how supply chains are designed, with flexibility, diversification and resilience baked in from the foundation.
“I believe the real test for business leaders isn’t how quickly they can reshuffle in response to the latest changes, it’s whether they’ve built an operation that won’t need to react to every headline.
Chris Barlow, Head of Manufacturing at MHA, commented: “Given that the Government estimates around five percent of UK steel exports and six per cent of aluminium exports by volume go to the US, this deal secures supply chains and exports into the US. It also avoids the market being flooded with cheap steel.
“However, the devil is in the detail, and several questions still remain around whether this deal will be ratified and changed. And most importantly, whether it will potentially have a detrimental effect on the UK’s trade deal with Europe.”