Ministers to Decide Which Carmakers Benefit from Reduced US Import Tariffs

Ministers in the UK are poised to make critical decisions on which British car manufacturers will benefit from lower United States import tariffs. This follows negotiations between British and American officials, aiming to finalise a tariff deal linked to the US-UK Economic Prosperity Agreement. The agreement includes favourable import duties for up to 100,000 vehicles a year. Insiders suggest the UK government will ultimately determine how these quotas are distributed among carmakers.

The proposed tariff reduction, from the current 25 per cent to a more manageable 10 per cent, has significant implications for the British automotive sector, given that the United States is the second-largest market for UK-made vehicles after the European Union. Automotive manufacturers, including Jaguar Land Rover and Aston Martin, are closely monitoring the outcome, with hopes that the deal will be backdated to cover exports starting from 8 May, the date the Economic Prosperity Agreement was originally announced.

With 101,000 British vehicles exported to the US last year, according to the Society of Motor Manufacturers and Traders, the quota will effectively cover current export volumes. However, growth ambitions among UK carmakers mean that any exports exceeding 100,000 units will still face the 25 per cent import duty. Jaguar Land Rover remains the largest exporter to the US, with shipments to the market valued at £8.5 billion in the latest financial year. The United States now accounts for 30 per cent of JLR’s global sales, up from 22 per cent the year before.

The controversy surrounding this export cap lies in its potential impact on manufacturers poised for expansion in the US market. Firms like Bentley, Mini, and Rolls-Royce are also vying for a share of the quota. Industry observers note this increase in American demand underscores the importance of securing equitable quota allocations from government officials.

Earlier in 2025, Donald Trump’s 25 per cent blanket tariff on auto imports shook the global automotive industry. Although temporary relief has been introduced for UK industry, the tight cap on exports could temper these benefits. Following the tariff announcement, Jaguar Land Rover took the precautionary measure of pausing US shipments in April but resumed deliveries later that month, anticipating the agreement’s finalisation within months.

As discussions continue, reductions for British-made car parts are also under review. A spokesperson for the Department for Business and Trade emphasised the government’s commitment to securing long-term solutions for domestic manufacturers and protecting valuable jobs amid ongoing changes to international trade relationships.