Trade pact between USA and Great Britain: tariffs on cars fall!

Trade pact between USA and Great Britain: tariffs on cars fall!

On the sidelines of the G7 summit in Canada, US President Donald Trump and British Prime Minister Keir Starmer made significant progress on the trade pact announced in May. This is seen as the US's first major agreement with a trading partner since tariffs were introduced in April. Trump signed a regulation providing tariff relief for up to 100,000 British cars per year, which is of great importance for the British car industry. British exports to the US currently face tariffs of 10% on most goods and 25% on steel, aluminum and cars. The new rules reduce tariffs on 100,000 British vehicles to 10% while opening up the US market for British beef and ethanol with easier access.

In addition, customs relief for aircraft parts from Great Britain was announced. Britain plans to import $10 billion worth of Boeing aircraft. Despite this progress, the lifting of US tariffs on British steel and aluminum is not planned for the time being, with the US Secretary of Commerce due to decide at a later date on possible tariff relief, depending on British concessions on supply chains and agricultural goods.

Details about the new trade pact

The agreement is not described by the British negotiating partners as a traditional free trade agreement, but as a framework for specific areas that should enable further negotiations. Trump himself described the agreement as a “great honor” and announced that many more agreements are on the horizon. It remains to be seen whether these advances could hinder Britain's rapprochement with the EU, as EU states may be at a disadvantage for the time being.

The British government spokesman emphasized the calm and pragmatic approach to the negotiations. Given the current economic situation in the UK, the car industry relies heavily on exports to the USA. Trade volume between the two countries was around 370 billion euros last year, with 70% of British exports to the US comprising services not affected by tariffs. In this context, reducing the tax for digital services is also being discussed.

In conclusion, the new US-UK trade pact presents both opportunities and challenges. Given the ongoing uncertainties in the global trade landscape, it remains essential to closely monitor developments over the next few months.