Landmark economic deal with United States saves thousands of  jobs for British car makers and steel industry
Source: gov.uk (2025-05-08)

Thousands of jobs have been saved as the Prime Minister secured a first-of-a-kind trade agreement with the US.

- Britain secures the first US trade deal protecting British business and British jobs, the second landmark deal in Britain’s national interest in a matter of days following the India deal
- Prime Minister delivers on his promise to save UK steel and British car makers – saving thousands of jobs across the country
- US tariffs on automotives immediately slashed from 27.5%, with steel and aluminium reduced to zero
- Unprecedented market access for British farmers with protections on food standards maintained
Thousands of jobs have been saved as the Prime Minister secured a first-of-a-kind trade agreement with the US.

It is the second major trade announcement this week – following the India Free Trade Agreement on Tuesday, this historic agreement with the US to slash tariffs delivers for UK carmakers, steelworks and farmers – protecting jobs and providing stability for exporters.

Car export tariffs will reduce from 27.5% to 10% - saving hundreds of millions a year for Jaguar Land Rover alone. This will apply to a quota of 100,000 UK cars, almost the total the UK exported last year.

The Prime Minister visited Jaguar Land Rover last month announcing greater freedom for car manufacturers to back British industry in the face of global headwinds. During this visit he told workers he would accelerate trade deals to protect their jobs, their livelihoods, and to champion British business worldwide.

The UK steel industry – which was on the brink of collapse just weeks ago – will no longer face tariffs thanks to today’s deal. The Prime Minister negotiated the 25% tariff down to zero, meaning UK steelmakers can carry on exporting to the US. This follows last month’s intervention from the Prime Minister to take control of British Steel to save thousands of jobs in Scunthorpe.

In a win for both nations, we have agreed new reciprocal market access on beef – with UK farmers given a quota for 13,000 metric tonnes. There will be no weakening of UK food standards on imports.

We will also remove the tariff on ethanol – which is widely used in our manufacturing sector - coming into the UK from the US, down to zero.

It is one of many international deals that the Government is landing to boost our economy – following an Indian trade deal which will add £4.8 billion to the UK economy and £2.2 billion in wages every year.

Prime Minister, Keir Starmer, said:

The new global era demands a government that steps up, not stands aside.

This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.

My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit rather than turning our back on the world.

As VE Day reminds us, the UK has no greater ally than the United States, so I am delighted that eight decades on, under President Trump the special relationship remains a force for economic and national security.

This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement.

My Government is determined to go further and faster to strengthen the UK’s economy, putting more money in working people’s pockets as part of our Plan for Change.

Business and Trade Secretary Jonathan Reynolds said:

I am delighted our calm approach and proactive engagement with the US has resulted in this deal which cuts tariffs for UK industry and cuts costs for businesses.

Businesses across the country will be glad to see our approach working, but this is only the beginning. We look forward to strengthening our trading relationship with the US through a wider economic deal, which will help us to deliver on our Plan for Change to provide economic stability and make this country fit for the future.

Adrian Mardell, Chief Executive Officer, JLR said:

The car industry is vital to the UK’s economic prosperity, sustaining 250,000 jobs. We warmly welcome this deal which secures greater certainty for our sector and the communities it supports. We would like to thank the UK and US Governments for agreeing this deal at pace and look forward to continued engagement over the coming months.

Work will continue on the remaining sectors – such as pharmaceuticals and remaining reciprocal tariffs. But – in an important move – the US has agreed that the UK will get preferential treatment in any further tariffs imposed as part of Section 232 investigations. The deal opens the way to a future UK US technology partnership through which our science-rich nations will collaborate in key areas of advanced technology, for example biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.

The Digital Services Tax remains unchanged as part of today’s deal. Instead the two nations have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US – opening the UK up to a huge market that will put rocket boosters on the UK economy.