by Temitope Oladeji
17/6/2025
President Donald Trump has approved a new trade measure that will ease some critical barriers between the United Kingdom and the United States, drawing a step forward in the two countries’ bilateral economic relations.
The agreement was signed into effect on Monday, enacting key portions of a broader deal reached by both countries last month, and will reduce tariffs on British car exports to the U.S.
Under the new order, up to 100,000 UK-made vehicles can now enter the U.S. market at a 10% tariff, down from the 25% rate imposed on all foreign car imports earlier this year.
The agreement follows weeks of negotiations, as the UK government sought to shield its industries from the impact of recently imposed tariffs by President Trump.
Speaking at the G7 summit in Canada, British Prime Minister Sir Keir Starmer hailed the deal as a “significant day” for both countries.
It is the first trade-related announcement from the White House since President Trump introduced sweeping tariffs on a range of imports earlier this year.
Despite the progress on car tariffs, the agreement does not yet resolve one of the UK’s top priorities: removing tariffs on steel and aluminum.
The U.S. continues to levy a 25% duty on these imports, and while Trump indicated plans for a similar system to that introduced for cars, no specifics were provided.
“We’re gonna let you have that information in a little while,” Trump said when asked directly about steel tariff exemptions for the UK.
He added, “The UK is very well protected. Do you know why? Because I like them.”
The UK government responded by saying it will continue working toward zero tariffs on key steel products.
Earlier this month, Britain narrowly avoided being included in a doubling of U.S. steel tariffs to 50% but faces a deadline of July 9 to finalize a deal or risk the higher rate being applied.
One major sticking point is the U.S. requirement that imported steel must be “melted and poured” in its country of origin to qualify for tariff relief.
With Tata Steel having shut down its blast furnaces in the UK last year and now relying on imported steel while transitioning to electric furnaces, this condition could pose a significant challenge.
Transport Secretary Heidi Alexander acknowledged ongoing negotiations, saying, “We’ve still got some more work to do.”
He further said, “We’re working through technical details around steel because we want to bring that 25% tariff down further.”
Gareth Stace, head of the industry group UK Steel, stressed the need for clarity. “The sector badly needs clarification over the ‘melted and poured’ requirement and the level of quotas available to UK steelmakers,” he said.
The agreement signed Monday also includes the removal of tariffs on certain aerospace components, another area of concern for British manufacturers.
Sir Keir Starmer described the deal as a “sign of strength” in the UK–US relationship and expressed hope that further progress will follow.