At the G7 Summit in Canada, Prime Minister Sir Keir Starmer and President Donald Trump confirmed the signing of a “historic” UK-US trade deal aimed at deepening economic ties between the two countries.
“These are real protections for two of our most critical industries,” Starmer told reporters, calling the agreement “a real sign of strength.” Trump echoed the sentiment, calling the accord “a fair deal for both” and boasting that “the UK is very well protected… because I like them.”
Under details released by the Department for Business and Trade, the UK aerospace sector will face no tariffs at all from the US, while the automotive industry will have 10% tariffs, down from 25%.
The steel industry still faces 25% tariffs for now, although this is less than the US’s global rate of 50% on steel and aluminium. The UK business department said the two leaders had pledged to “make progress towards 0% tariffs on core steel products as agreed.” However, the US is still seeking assurances from the UK over the Chinese ownership of British Steel, which presents a possible stumbling block.
Key gains for automotive and aerospace
-
Automotive tariffs slashed: US duties on UK-made cars will drop from 27.5% to 10% for the first 100,000 vehicles annually. This follows the earlier May framework and is expected to take effect by the end of June.
-
Aerospace exports exempted: The deal ensures zero tariffs on aircraft parts and engines, a boon for companies like Rolls-Royce. These products will be excluded from sector-targeted tariffs related to national security reviews .
Commenting on the announcement, Mike Hawes, SMMT Chief Executive, said: “This is great news for the UK automotive industry, helping the sector avoid the severest level of tariffs and enabling many manufacturers to resume deliveries imminently.
“We wait to see the full details of the deal and how it will be administered but this will be a huge reassurance to those that work in the sector and bolster the confidence of our important US customers. The fact the UK has secured a deal, ahead of many competitors, and which makes automotive a priority, should be recognised as a significant achievement.”
Kevin Craven added: “The latest executive order leaving the US is phenomenally welcome news for the aerospace sector that delivers £13.6bn in value to and over 100,000 jobs to the UK economy. As of today, aerospace is the only sector to be completely tariff free.
“The impact of this cannot be overstated – the role of UK aerospace in the wider global landscape is critical, keeping people connected and ensuring sustainable, prosperous innovation. We wholeheartedly commend the negotiating teams both at home and across the pond, and hope to see this trend of freer, closer trade and cooperation with our international friends and allies continue.”
Steel and aluminium tariffs in a state of flux
While the headline sectors secured swift progress, the metals industry remains in limbo. A 25% tariff on UK steel and aluminium still stands, though falls short of the 50% global rate Trump imposed elsewhere. Officials noted that any future quota exemptions depend on London meeting strict supply‑chain security standards, including demonstrating domestic “melt and pour” operations.
Britain’s steel sector, already under pressure, welcomed the pause but cautioned that the previously promised zero‑tariff resolution, is still pending. Conversations will continue “in the coming weeks”.
For more articles like this, visit our Leadership channel
