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USADepartment for Business and Trade (DBT)Latest NewsManufacturingJob creation and losses

UK-US deal saves ‘thousands’ of jobs in car industry

by Jo Faragher 9 May 2025
by Jo Faragher 9 May 2025 Prime minister Keir Starmer visits Jaguar Land Rover in Solihull last month
Geopix / Alamy Stock Photo
Prime minister Keir Starmer visits Jaguar Land Rover in Solihull last month
Geopix / Alamy Stock Photo

The UK-US deal on tariffs agreed yesterday (8 May) will save ‘thousands’ of jobs, according to prime minister Keir Starmer.

The landmark agreement between the UK government and Donald Trump’s administration will cut car export tariffs from 27.5% to 10%, a move that alone could help remove the risk of redundancy from thousands of employees in the industry.

The UK steel and aluminium industries will no longer face any tariffs, after having 25% duties placed on them in Trump’s initial tariff announcements.

There will still be a 10% tariff on most goods imported into the US, however, but the Department of Business and Trade said negotiations were ongoing.

Manufacturing jobs

British Steel puts brakes on redundancy process 

Rosier growth figures don’t take into account Trump’s tariffs 

There was also no change to the UK 2% digital services tax on US companies, which requires major firms such as Meta and Google to pay tax on their UK user revenue.

Business secretary Jonathan Reynolds said that “without the breakthrough on these sectoral tariffs that we’ve been able to announce today, thousands of people stood to lose their jobs very soon in the UK, and the economic damage to the UK would have been very significant from there”.

Yesterday British Steel announced it would begin recruitment again after the government intervened to keep its blast furnaces running, and the removal of the tariff is a further boost to the sector.

Speaking from a Jaguar Land Rover factory in the West Midlands, Starmer praised the “historic deal”.

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

“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.”

Adrian Mardell, chief executive of JLR said the deal would “secure greater certainty” for the UK car industry, which employs around 250,000 people.

The US has agreed that the UK will get preferential treatment in negotiations on pharmaceutical and further remaining tariffs, which the UK government believes could open up further partnerships in the technology and science sectors.

The agreement follows a free-trade deal secured earlier this week between the UK and India, which will see employees moving between the UK and India only paying social security contributions in one country at a time.

 

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Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

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