Trump Formalizes UK-US Tariff Agreement at G7 Summit

The recent executive order from President Trump aims to ease tariffs on UK cars but leaves steel levies intact, highlighting complex trade relations.

President Donald Trump has officially signed an executive order that will reduce tariffs on cars imported from the UK into the United States, aligning with a previously negotiated tariff agreement between the two nations announced last month. The announcement came during the G7 summit in Canada, where UK Prime Minister Sir Keir Starmer described the day as "very important" for both countries.

This latest move follows extensive negotiations aimed at mitigating the financial impact of Trump's tariffs on British businesses. However, the agreement stipulates a 10% tariff on most UK imports, including vehicles, while failing to address the anticipated reduction of steel and aluminum tariffs—a contentious aspect of the deal.

This tariff agreement marks the first of its kind since Trump enacted broad tariffs on various imports at the beginning of the year, sparking international unrest, particularly within the UK’s automotive and steel sectors.

As part of the newly signed order, the US will permit up to 100,000 UK vehicles at a reduced tariff of 10%, a decrease from the previous 25% import tax. On the topic of steel tariffs, Trump indicated that more information would be released in due time, although no specifics were disclosed. In addition, the deal will eliminate tariffs on certain aerospace products.

Sir Keir Starmer characterized the agreement as a "sign of strength" in US-UK relations, while Trump expressed confidence in the UK's protection under the newly established terms, referencing his favorable view of British leaders.

The deal will formally take effect one week after its official publication. Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, remarked on the importance of this agreement, emphasizing the positive impact on the automotive sector's ability to resume deliveries.

Business and Trade Secretary Jonathan Reynolds highlighted the efforts from both governments to alleviate the tariff burden on UK companies. The UK has agreed to increase import quotas for US beef and ethanol, while firmly insisting on the maintenance of food safety regulations.

Despite the optimism surrounding these developments, the current agreement represents a modest step, lacking the extensive scope of a full free-trade deal long discussed in UK corridors of power. Trump himself acknowledged Sir Keir's success in negotiating this arrangement where previous leaders had struggled. Nevertheless, criticism remains, with opposition figures like Conservative leader Kemi Badenoch branding the undertaking a "tiny tariff deal."