US-UK Trade Tension Eases: Trump Administration Reduces Automotive Tariffs and Offers New Economic Prosperity Deal
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US-UK Trade Tension Eases: Trump Administration Reduces Automotive Tariffs and Offers New Economic Prosperity Deal
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According to the Trade Compliance Resource Hub, as of June 4, 2025, the United States implemented a 25% tariff specifically on steel products originating from the United Kingdom, while other countries face a 50% rate. This is part of a broader realignment of American trade policies targeting steel and derivative products. There are some notable exceptions for UK-origin aerospace goods that fall under the WTO Agreement on Trade in Civil Aircraft, which remain exempt from these tariffs as of June 23, 2025. However, almost all previous country exclusions from the existing Section 232 tariffs on aluminium and derivative aluminium articles have been revoked, tightening the trade environment significantly for UK exporters. Additionally, the Secretary of Commerce now holds the power to adjust UK tariff rates or impose import quotas at any time, operating under the framework of the U.S.-UK Economic Prosperity Deal announced on May 8, 2025.
For listeners tracking the automotive sector, JD Supra reports that the United States has reduced tariffs on UK automotive imports and parts from 27.5% to 10%, effective by the end of June 2025. This reduction marks one of the most significant recent changes and comes under the executive order aligned with the new Economic Prosperity Deal between the US and UK. The aim is to balance American industrial interests with the need to maintain stable transatlantic trade, especially as both countries navigate other contentious issues like tariffs on steel, trucks, and aerospace products.
Further context from Politico details that President Trump’s administration has also offered a baseline 10% tariff deal to the European Union, with exceptions in sensitive sectors such as aircraft and spirits. For countries that do not conclude new US trade deals by August 1, tariffs could revert to the higher rates seen earlier this year.
In summary, the US-UK tariff environment is highly active and subject to rapid change. Steel faces a 25% US tariff, but key aerospace products enjoy exemptions. UK automobiles and their parts now benefit from a 10% US tariff rate, down from 27.5% last year. Broadly, the new Economic Prosperity Deal is shaping a more predictable—though still protectionist—framework for UK exporters.
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