12:23 pm, May 8, 2025
Donald Trump is this afternoon expected to announce a new trade deal between the US and UK which could have major ramifications for the automotive industry.
Carmakers were rocked earlier this year when the US president announced a swathe of new tariffs, including 25% charges on all cars imported into the US.
Last week, Aston Martin said it had begun ‘limiting imports’ to the US in response to the tariffs, while JLR has only recently resumed exports, following a temporary pause.
Now however, it seems that a compromise deal is likely to have been reached which will see the measures watered down considerably.
The BBC reports that the package could see the introduction of lower tariffs on US cars into the UK, from 10% to just 2.5%.
In exchange, the broadcaster says that the UK ‘could win some sort of tariff-free or lower tariff quota exemption’.
It is hoped that similar terms will also be struck to reduce tariffs on British steel and aluminium.
Another option could be for a quota system to be introduced, which would see tariffs cut or axed altogether for a certain number of cars, with additional charges on vehicles above that figure.
The full details are expected to be made public this afternoon (May 8) at 3pm, when Trump will lead a press conference from Washington.
The president has promised a ‘very big and exciting day’ for US-UK relations having earlier hinted at a trade deal with a ‘big and highly respected country’.
Prime minister Sir Keir Starmer, who had been due to spend the day focusing on events to mark the 80th anniversary of VE Day, said he would ‘act in our national interest’ to ‘deliver security and renewal for our country’.
In a post on his Truth Social platform, Trump said: ‘The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.
‘Because of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!’
As mentioned by Trump himself, the deal with the UK will be the first agreement announced since he introduced the tariffs on April 2.
Away from the automotive industry, some reports have suggested a deal could see changes made to the digital services tax that currently affects mainly US tech companies.
However, the government has ruled out lowering food standards to allow more US agricultural products into the country, or watering down the Online Safety Act, which some in America regard as placing restrictions on freedom of speech.
Any announcement would come just two days after the UK revealed it had agreed a ‘landmark’ trade deal with India, which was welcomed by the SMMT.
The Liberal Democrats called for MPs to be given a vote on any trade deal with the US so the agreement could be ‘properly scrutinised’.
Daisy Cooper, the party’s deputy leader and Treasury spokeswoman, said: ‘A good trade deal with the US could bring huge benefits, but Liberal Democrats are deeply concerned that it may include measures that threaten our NHS, undermine our farmers or give tax cuts to US tech billionaires.
‘If the government is confident the agreement it has negotiated with Trump is in Britain’s national interest, it should not be afraid to bring it before MPs.’
Meanwhile, Scottish first minister John Swinney has said that any trade deal between the US and UK must be on the ‘right terms’.
He told the PA news agency: ‘I think anybody’s observation would be that a trade deal would be an advantage if we could secure one, as long as it’s on the right terms.
‘Certainly as an alternative to the enormous economic damage being applied as a consequence of the tariffs, a trade deal which is in our interests would be beneficial.
‘But we will have to wait until we scrutinise the detail to determine whether any proposed trade deal is actually in our interests.’
