The UK Government has announced a historic new trade agreement with the United States, described as a “first-of-its-kind” deal that will immediately slash tariffs on key British exports and safeguard thousands of jobs in the automotive and steel industries.
The agreement, secured by Prime Minister Keir Starmer and Business and Trade Secretary Jonathan Reynolds, marks Britain’s second major trade breakthrough this week, following a comprehensive deal with India. The new US-UK accord significantly reduces tariffs on cars, steel, aluminium, and ethanol, and opens new doors for British farmers — all while maintaining the UK’s food safety standards.
Major Boost for British Industry
The deal eliminates the 25% US tariff on British steel, a move seen as critical to saving thousands of jobs at plants such as British Steel in Scunthorpe, which faced collapse just weeks ago. Automotive exports will also benefit, with car tariffs reduced from 27.5% to 10% for a quota of 100,000 vehicles — nearly matching the UK’s total car exports to the US last year.
Jaguar Land Rover, one of the country’s largest car manufacturers, is expected to save hundreds of millions of pounds annually under the new terms.
“This historic deal delivers for British business and British workers,” said Prime Minister Keir Starmer. “It protects thousands of jobs in key sectors and puts more money in working people’s pockets. This is jobs saved, jobs won — but not job done.”
The Prime Minister praised the “special relationship” with the US, adding that the agreement under President Donald Trump is a win for both economic and national security.
New Opportunities for UK Farmers
British farmers will gain access to the US market with a 13,000-tonne beef export quota, while UK food standards on imports remain intact. In addition, tariffs on ethanol — a key input in UK manufacturing — will be reduced to zero.
Looking Ahead
The agreement also paves the way for a future UK-US technology partnership, with plans to collaborate on cutting-edge sectors such as biotechnology, quantum computing, and space exploration.
Business and Trade Secretary Jonathan Reynolds called the deal a result of “calm, proactive engagement,” saying it demonstrates the Government’s commitment to economic stability under its “Plan for Change.”
“This is only the beginning,” said Reynolds. “We are building a future-fit Britain that leads in global trade.”
Industry Welcomes the Deal
Adrian Mardell, CEO of Jaguar Land Rover, praised the swift action taken by both governments. “The car industry sustains 250,000 jobs in the UK. This deal brings welcome certainty and shows what can be achieved when industry and government work hand in hand.”
Work continues on remaining sectors, including pharmaceuticals and broader reciprocal tariffs. The UK has also secured preferential treatment in future US tariff decisions under Section 232, signalling deeper cooperation ahead.
While the UK’s Digital Services Tax remains in place, both countries agreed to work toward a streamlined digital trade agreement — aimed at reducing paperwork and unlocking new markets for British tech firms.
With two major trade agreements in one week, the UK Government has positioned itself at the forefront of global trade talks, signalling a more active and outward-facing approach to international commerce.
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