The UK government is exploring tariff concessions on American-made vehicles as it seeks to protect key exports from proposed US levies.
According to the Wall Street Journal and the Financial Times, a plan is under consideration that would see the UK reduce its car import tariffs on US vehicles from 10% to 2.5%. The move is seen as a potential bargaining tool in talks aimed at securing a broader trade agreement with the United States under the Trump administration.
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The proposal, reportedly circulating in government circles, would align UK tariffs on US cars with those currently applied by the US to car imports from other countries. Officials quoted in the FT said the reduction could be achieved without breaching World Trade Organization rules, provided it formed part of a broader bilateral trade deal. Trade expert David Henig noted that while WTO agreements are meant to cover “substantially all trade,” the requirement is loosely enforced.
However, Bloomberg presents a different emphasis, reporting that Chancellor Rachel Reeves is focusing her efforts on securing a full exemption from the 25% tariffs the US is proposing on British car exports. Reeves is currently in Washington for the International Monetary Fund’s spring meetings and is using the visit to lobby US Treasury Secretary Scott Bessent and senior business leaders.
Reeves warned of significant economic consequences from the US tariff policy shift, saying before her departure: “I am in no doubt that the imposition of tariffs will have a profound impact on the global economy and the economy at home.” The IMF has also flagged the UK as particularly exposed to trade disruptions, downgrading its UK growth outlook and citing elevated financial stability risks.
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By GlobalDataUK car exports to the US, particularly luxury brands such as Bentley, Aston Martin and Jaguar Land Rover, represent the largest single category of UK goods sold to the American market, totalling £6.4 billion annually. In contrast, US vehicle exports to the UK are worth just $1.4 billion, as many US-branded models sold in Britain are manufactured in the EU.
Bentley Motors is based in Crewe, England, and has operated as a subsidiary of Germany’s Volkswagen Group since 1998. Jaguar Land Rover (JLR) has been owned by India’s Tata Motors since 2008. Aston Martin Lagonda Global Holdings PLC, headquartered in Gaydon, Warwickshire, remains an independent British manufacturer.
Industry representatives in the UK have voiced alarm over the proposed 25% US import levy. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the measure was having a “severe, significant and immediate” impact on British manufacturers, particularly in the premium segment.
While Reeves has not confirmed the tariff reduction figures cited in US and UK media, she has not dismissed the reports either. Pressed on the potential for the UK to lower its car tariffs, she declined to offer a “running commentary” on negotiations but indicated flexibility within the bounds of a fair and reciprocal agreement.
Reeves has also stated that the UK will not compromise on regulatory standards. “We are not going to be changing our standards based on asks from foreign governments,” she said, referring to vehicle safety and other product rules.
As talks continue, the UK government is seeking to balance domestic industrial concerns with the strategic objective of strengthening post-Brexit trade ties with the US.
