According to audit and tax experts at Blick Rothenberg, the new UK-U.S. trade agreement is an important step in transatlantic economic relations and an important step in the UK's automotive industry.
The agreement is formally named as the general terms of the United States of America and the United Kingdom’s economic boom agreement – which will reduce British car export tariffs to the United States from 27.5% to 10%. However, Robert Salter, director of Blick Rothenberg, believes the deal is limited to damage caused by President Trump's previous protectionist policies and does not open up new market opportunities.
“While the 10% tariff is obviously much better than the 27% tariff under President Trump, it is important to remember that under Joe Biden's previous administration, UK auto imports face only 2.5% tariffs.”
The 10% tariff only applies to the top 100,000 cars imported into the United States each year. Last year, the UK exported about 101,000 cars to the United States, meaning the agreement has grown effectively.
“This restriction means the UK auto industry cannot expand exports to the United States without being subjected to higher tariffs,” Salter explained. “What this exchange does is to keep the status quo – which does not help the industry grow.”
He added that while the agreement could protect existing jobs and exports, it did not bring any meaningful new business advantages or incentives to invest in UK automobile production in the U.S. market.
Salter also questioned the broader economic value of the deal, calling it a limited framework without bringing macroeconomic benefits.
“While the agreement may provide the basis for more meaningful trade terms in other sectors, the deal itself does not bring a significant victory to the UK economy as a whole,” he said.
The comments contrasted sharply with more optimistic reactions in some corners of the government and industry, which included tariffs on UK steel and certain other exports.
The Association of Automobile Manufacturers and Traders (SMMT) has previously welcomed the deal to eliminate the “direct threat” to exports, but experts like Salter warned that this should not be confused with progress.
“It's a damage restriction agreement,” Salter concluded. “It prevents further harm – but it's not a trade victory in the way it appears.”
As the UK hopes to increase exports and develop its manufacturing base, Salter urges policy makers to pursue more ambitious sector-specific trade items, especially in high-value export industries such as automobiles, aerospace and green technology.
As domestic automobile production becomes increasingly important under pressure and trade competitiveness, the latest deals may have been buying the UK for some time, but the breakthrough in demand in the automotive industry has not been made.
