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U.S. and U.K. Strike Preliminary Trade Deal with Targeted Tariff Reductions

The agreement includes cuts to auto and steel tariffs, expanded U.S. market access, and a controversial investment security clause targeting Chinese influence.

Drone view shows Volkswagen Group cars bound for cargo ship export to the United States at the seaport of Emden near the estuary, where the River Ems flows into the North Sea, in Emden, Germany, April 2, 2025. REUTERS/Erol Dogrudogan/File Photo
Britain's Prime Minister Keir Starmer, left, and U.S. President Donald Trump shake hands at a joint press conference in the East Room at the White House Thursday, Feb. 27, 2025, in Washington. (Carl Court/Pool Photo via AP)
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Overview

  • Tariffs on U.K. automobile imports to the U.S. will drop from 27.5% to 10% for the first 100,000 vehicles annually, benefiting luxury carmakers like Jaguar Land Rover.
  • The U.S. will exempt U.K. steel and aluminum from the 25% tariffs, with final details on these exemptions still under negotiation.
  • U.S. exporters gain $5 billion in new market opportunities in the U.K., including expanded access for ethanol, beef, and machinery.
  • Trump’s universal 10% tariff on U.K. goods remains unchanged, preserving a baseline duty that limits broader relief.
  • The deal includes a U.S. 'veto-like' mechanism over major Chinese investments in the U.K., raising concerns about sovereignty and concessions.