UK Aerospace and Automotive Sectors Gain Major Wins in US Trade Agreement

British aircraft parts, including Rolls-Royce engines, are set to be exempted from US import tariffs under an evolving trade agreement with the administration of Donald Trump. The landmark development is anticipated to provide a significant boost to the UK’s £40 billion aerospace industry, a sector supporting around 450,000 jobs nationwide. According to Howard Lutnick, US Secretary of Commerce, these exemptions are part of a broader economic prosperity deal announced recently between the two nations.

The agreement, though yet to be fully finalised, is expected to solidify zero-tariff guarantees for UK aerospace exports, offering long-term security to the industry. Jonathan Reynolds, the UK Business Secretary, has stated that this element of the deal will be critical in maintaining crucial business relationships across the Atlantic. Rolls-Royce engines are particularly essential for American aerospace giant Boeing, which relies on their production for its commercial aircraft and requires a regular flow of parts for maintenance and repairs within the United States.

The trade agreement includes other substantial wins for British industries. Tariffs on cars exported to the US are poised to drop from 27.5% to 10% for at least 100,000 vehicles annually. The deal also eliminates tariffs on steel, effectively safeguarding jobs in critical UK manufacturing sectors, including the Jaguar Land Rover plant in the West Midlands. Peter Mandelson, Britain’s ambassador to the US, highlighted that these measures have already prevented immediate job losses in struggling industries.

Negotiations are continuing to explore greater quotas for British-made car exports beyond the initial 100,000-unit cap. This move would maximise the opportunity for UK automakers to expand their share of the lucrative US market. Keir Starmer, the UK Prime Minister, underlined the importance of lifting limits on exports to unlock greater potential for economic growth.

The aerospace provisions of the trade deal arrive as the US investigates potential national security risks surrounding imported aircraft and components. Concerns include the concentration of imports among a few suppliers and the impact of foreign government subsidies on the market. Despite the ongoing probe, lobbying efforts by both British and American aerospace stakeholders have played a critical role in preserving a 45-year-old treaty enabling duty-free trade in aviation goods.

While some terms of the agreement remain ambiguous, the exemption for Rolls-Royce engines and related aerospace components underscores the importance of trade cooperation between the two allies. For both nations, this deal represents a continued commitment to fostering economic growth, enhancing industrial stability, and strengthening transatlantic partnerships.