On June 16, 2025, the United States and the United Kingdom formally implemented the General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal (the “General Terms”). In a related Executive Order (EO), President Donald Trump set forth agreements reached with the UK regarding tariffs on imports of (i) automobiles and automobile parts; (ii) civil aircraft; and (iii) future relief on imports of aluminum and steel articles and their derivatives.
Automobiles and Automobile Parts. The EO establishes an annual tariff-rate quota of 100,000 automobiles as classified in heading 8703 of the Harmonized Tariff Schedule of the United States (HTSUS) for automobiles that are products of the United Kingdom. Imports of automobiles within the tariff-rate quota that would otherwise be subject to a 25 percent tariff will now be subject to a 7.5 percent tariff, in addition to the most-favored-nation rate for automobiles of 2.5 percent, for a combined tariff of 10 percent. Automotive parts specified in the relevant section of Chapter 99 of the HTSUS that would otherwise be subject to a 25 percent tariff will instead be subject to a total tariff of 10 percent (including any most-favored-nation tariffs), provided that they are products of the United Kingdom and are for use in automobiles that are products of the United Kingdom.
Aerospace. For products of the United Kingdom that fall under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft, the U.S. tariffs previously imposed will no longer apply. An October 2019 ruling by a WTO arbitrator allowed the United States to take “countermeasures” and implement retaliatory tariffs due to European Union (EU) subsidies provided for large civil aircraft manufacturers. That ruling determined that the United States could take countermeasures at a level not to exceed $7.49 billion annually. For additional background on this dispute and the resulting retaliatory tariffs, see Thompson Hine Updates of October 4, 2019, December 9, 2019, February 17, 2020, August 13, 2020, October 15, 2020 and November 11, 2020. Overall, under the General Terms, both parties “committed to strengthen aerospace and aircraft manufacturing supply chains by establishing tariff-free bilateral trade in certain aerospace products.”
Aluminum and Steel Articles and Their Derivative Articles. In the General Terms, the United Kingdom has committed to working to meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities. The EO states that at a future time deemed appropriate, the United States will establish a tariff-rate quota for aluminum articles and derivative aluminum articles that are products of the United Kingdom. Imports of aluminum articles or derivative aluminum articles that are products of the United Kingdom in excess of the established tariff-rate quota would remain subject to the Section 232 national security duties of 25 percent.
For additional background on the overall U.S.-UK General Terms, see Thompson Hine Update of May 9, 2025.