Britain’s trade deal with the US will save the UK £6.5bn, research by the University of Birmingham has found.
Full levies would have cost the UK £10.8 billion by 2030 with 137,000 jobs lost or at risk, according to analysis by economists Dr Huanjia Ma and Dr Matt Lyons at UoB.
Removal of barriers
Dr Ma said: “Our initial estimate shows the new UK-US trade deal, while still leaving the UK worse off than in a no-tariff scenario, could more than halve the total negative impact on GDP from £10.8bn to £4.3bn.
“This mainly reflects smaller shocks to the automotive sector and the removal of beef, steel and aluminium trade barriers.”
Responding to the latest figures, the business secretary, Jonathan Reynolds, said: “This deal is just the beginning, and talks will continue on a wider UK-US economic deal.”
Competitive advantage
The UK finds itself better placed than its European rivals when it comes to cars. Cars are our biggest export to the US.
Tariffs are set at 10% for a quota of 100,000 British cars imported into the US. This is what the current levels of export stand at. Car exports to the UK were valued at £9 billion in 2024.
The US imports mainly luxury cars from the UK such as Jaguar, Land Rover and Aston Martin.
European cars imported into the US will be subject to a tariff of 17.5% conferring the UK with a significant competitive advantage.
UK Steel
UK exports of steel to the US will not be subject to tariffs unlike the rest of the world, which is subject to a 25% tariff.
The US has suggested that the UK nationalised British Steel as part of the trade agreement, but this has not been confirmed by the UK government.
