US Politics
Tariffs slashed as historic UK-US trade deal between Starmer and Trump comes into effect
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The historic UK-US trade deal between Sir Keir Starmer and Donald Trump has finally come into effect – eight weeks after it was hailed as “fantastic” breakthrough for both countries.
Tariffs affecting the UK car and aerospace sectors were slashed at 5.01am today (30 June). But a 25 per cent levy on steel will still apply, as the two sides continue to negotiate.
The prime minister welcomed the implementation of the agreement, which he said “delivers for British businesses and protects UK jobs”.
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When it was first unveiled in May, President Trump described the trade deal as “great”, while the Labour leader said it would fulfil his promise to protect carmakers and, crucially, save the UK’s steel industry.
Launched with great fanfare, which included a joint transatlantic press conference, there was consternation among industry when weeks went by and still the deal did not take effect.
But now car export tariffs to the US have been reduced from 27.5 per cent to 10 per cent.
Ministers said the move would save hundreds of millions of pounds every year and support hundreds of thousands of jobs.
The aerospace sector has also seen the removal of 10 per cent tariffs on goods like engines and aircraft parts, helping companies such as Rolls Royce.
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Under the terms of the original deal in May, however, levies on steel and aluminium were due to be slashed to zero.
At the same time a general 10 per cent tariff for other goods would remain and Britain agreed to scrap its tariff on ethanol coming into the UK from the US.
However, whopping tariffs of 25 per cent will remain on British steel – one of the industries that can least afford them – for forseeable future until another deal can be hammered out between both sides.
The news comes just months after MPs were forced to hold an unusual Saturday sitting of Parliament to approve emergency plans to save British Steel’s Scunthorpe blast furnaces by taking control away from its Chinese owners.
The implementation of the deal will be seen as a coup for the prime minister, who resisted calls to retaliate against the US and instead ploughed a diplomatic furrow.
In May, Mr Trump personally praised Sir Keir for getting the deal over the line. He said: “The US and UK have been working for years to try and make a deal, and it never quite got there. It did with this prime minister, so I want to just congratulate you.”
But Conservative leader Kemi Badenoch said the UK had been “shafted”, contrasting how much businesses would have to pay with their costs before Trump entered the White House.