US-UK Trade Deal Cuts Car, Steel, Beef, and Ethanol Tariffs, Boosts Aerospace Industry

The United States and the United Kingdom have announced a trade agreement aimed at reducing tariffs on specific goods. President Donald Trump and UK Prime Minister Keir Starmer have both hailed the deal, with Trump stating that it opens the British market to American farm products and other goods. Under the agreement, tariffs on UK car exports to the US have been reduced from 27.5% to 10% for up to 100,000 vehicles annually, aligning with the number of cars the UK exported last year. Jaguar Land Rover (JLR), a subsidiary of Tata Motors, had shipped 1.02 lakh vehicles to the US in 2024. Additionally, tariffs on UK steel and aluminum exports to the US have been eliminated, previously set at 25%. In exchange, the UK has agreed to remove tariffs on US beef and ethanol, with a tariff-free quota of 13,000 metric tonnes for beef and the ethanol tariff removed. The deal also includes provisions for the aerospace industry, with the US agreeing to drop tariffs on Rolls-Royce engines and other plane parts from the UK. In return, a UK airline is expected to announce a purchase of $10 billion worth of Boeing planes. The UK has also agreed to reduce its average tariffs on US products to 1.8%, impacting 2,500 US products, and creating opportunities for 5 billion dollars in new US exports. The agreement, however, does not cover pharmaceuticals, digital services tax, or film tariffs, which remain subjects for future negotiations. US stock markets reacted positively to the announcement, with the Dow poised to jump more than 300 points. The deal is seen as a first step in a series of potential trade agreements, with Trump indicating that negotiations with other countries, including Europe and China, are in progress.